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Price Discrimination in Dynamic Cournot Competition

Wei-li Zhang, Qi-Qing Song and Yi-Rong Jiang

Discrete Dynamics in Nature and Society, 2019, vol. 2019, 1-8

Abstract:

This paper introduces a new Cournot duopoly game and gives an applied study for price discrimination in a market by dynamic methods. One of two oligopolies has two different prices for a homogeneous product, while the other charges one kind of price. It is found that there is only one stable equilibrium for the discrete dynamic system, and a corresponding stable condition is given. Using a discriminative price is not always beneficial to a firm in equilibrium. If both oligopolies carry out price discrimination, the market’s average price is lower than when only one oligopoly does it. The results are verified by numerical simulations.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnddns:9231582

DOI: 10.1155/2019/9231582

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