Repeated price competition with increasing marginal costs |
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Authors: | Till Requate |
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Affiliation: | 1. Institute of Mathematical Economics, University of Bielefeld, 33501, Bielefeld, Germany
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Abstract: | We consider a repeated price setting game with firms facing increasing marginal costs and positive fixed costs. Besides setting prices, firms may decide to be not active. Since it is well known that there is no Nash-equilibrium in pure strategies in the stage game, we look for pure strategy equilibria in the repeated game and give a full characterization of all stationary symmetric equilibrium outcomes, supported by optimal penal codes (in pure strategies). [JEL-classification: D43, L13] |
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