Firm competition in a probabilistic framework of consumer choice

Hao Liao, Rui Xiao, Duanbing Chen, Matus Medo and Yi-Cheng Zhang

Papers from arXiv.org

Abstract: We develop a probabilistic consumer choice framework based on information asymmetry between consumers and firms. This framework makes it possible to study market competition of several firms by both quality and price of their products. We find Nash market equilibria and other optimal strategies in various situations ranging from competition of two identical firms to firms of different sizes and firms which improve their efficiency.

Date: 2013-12
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse and nep-ind
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Published in Physica A 400, 47, 2014

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1312.3826

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