The Dynamics of Market Competition

Jeffrey Yi-Lin Forrest, Jeananne Nicholls, Kurt Schimmel and Sifeng Liu
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Jeffrey Yi-Lin Forrest: Slippery Rock University
Jeananne Nicholls: Slippery Rock University
Kurt Schimmel: Slippery Rock University
Sifeng Liu: Nanjing University of Aeronautics & Astronautics

Chapter Chapter 3 in Managerial Decision Making, 2020, pp 41-63 from Springer

Abstract: Abstract This chapter, which is mainly based on (Forrest et al. 2017b), studies the dynamics of a coordinate monopoly with m incumbent risk-neutral firms regarding how these firms compete by adjusting prices and when new competition(s) will enter the market with expectations of making more profits than any of the incumbents. Major findings include (1) how risk neutrality in a developed marketplace can lead to stagnation in expected profits and irrational decision on pricing, (2) a sufficient and necessary condition under which new competitor(s) will enter the market, although the market is coordinately monopolized, etc.

Date: 2020
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DOI: 10.1007/978-3-030-28064-2_3

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