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Cournot Oligopoly: A Discrete Time Sticky-Prices Paradox

Pierre Bernhard () and Marc Deschamps ()
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Pierre Bernhard: INRIA Center of Université Côte d’Azur
Marc Deschamps: Université de Franche-Comté

Dynamic Games and Applications, 2025, vol. 15, issue 2, No 15, 693-707

Abstract: Abstract This article studies the issue of sticky prices in the context of a dynamic Cournot oligopoly model in discrete time with n asymmetric firms, and with costs and demand linear. We recover the somewhat surprising fact of the related continuous time literature that the asymptotic price is lower than the price of the repeated game. But contrary to the continuous time case, in discrete time we find (1) that the limit at vanishing viscosity coincides with the non-sticky case, and, more surprisingly (2) that the equlibrium price trajectory oscillates around the asymptotic price.

Keywords: Sticky price; Cournot oligopoly; Dynamic game; Discrete time (search for similar items in EconPapers)
JEL-codes: C61 C72 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13235-024-00590-7

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