Dynamic oligopolies without full information and with continuously distributed time lags

Publisher:
Elsevier Science Bv
Publication Type:
Journal Article
Citation:
Journal Of Economic Behaviour & Organization, 2004, 54 (4), pp. 495 - 511
Issue Date:
2004-01
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Dynamic oligopolies are examined without full information on the price function, with each firm using a perceived price function that usually differs from the actual inverse demand function of the market. It is assumed that firms experience time lags in obtaining and implementing information on the price and also on output. Under realistic assumptions we show that without time lags the steady state is always locally asymptotically stable whereas in the presence of time lags situations of local instability may occur. The possibility of limit cycles is examined, and some special cases are considered.
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