Dynamic limit pricing
Author: Flavio Toxvaerd
Publisher:
Published: 2010
Total Pages: 35
ISBN-13:
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Author: Flavio Toxvaerd
Publisher:
Published: 2010
Total Pages: 35
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DOWNLOAD EBOOKAuthor: John Blackwell Chilton
Publisher:
Published: 1989
Total Pages: 332
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DOWNLOAD EBOOKAuthor: Christopher D. Gedge
Publisher:
Published: 2014
Total Pages: 76
ISBN-13:
DOWNLOAD EBOOKThe one-shot nature of most theoretical models of strategic investment, especially those based on asymmetric information, limits our ability to test whether they can fit the data. We develop a dynamic version of the classic Milgrom and Roberts (1982) model of limit pricing, where a monopolist incumbent has incentives to repeatedly signal information about its costs to a potential entrant by setting prices below monopoly levels. The model has a unique Markov Perfect Bayesian Equilibrium under a standard form of refinement, and equilibrium strategies can be computed easily, making it well suited for empirical work. We provide reduced-form evidence that our model can explain why incumbent airlines cut prices when Southwest becomes a potential entrant into airport-pair route markets, and we also calibrate our model to show that it can generate the large price declines that are observed in the data.
Author: Stephen P. Magee
Publisher:
Published: 1977
Total Pages: 28
ISBN-13:
DOWNLOAD EBOOKAuthor: Hiroyasu Akakabe
Publisher:
Published: 1991
Total Pages: 8
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DOWNLOAD EBOOKAuthor: Stephen W. Salant
Publisher:
Published: 1977
Total Pages: 46
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DOWNLOAD EBOOKAuthor: Edward Joseph Rifkin
Publisher:
Published: 1978
Total Pages: 272
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DOWNLOAD EBOOKAuthor: Garth Saloner
Publisher:
Published: 1984
Total Pages: 36
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DOWNLOAD EBOOKAuthor: Diana L. Strassmann
Publisher:
Published: 1984
Total Pages: 177
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DOWNLOAD EBOOKAuthor: Buya-Bwa-Nshi Ilunga
Publisher:
Published: 1991
Total Pages: 328
ISBN-13:
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