Cost of Delay, Deadlines and Endogenous Price Leadership

Tuvana Pastine and Ivan Pastine

No 3054, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper analyses endogenous price leadership in a duopolistic market with differentiated products and symmetrically informed firms. We study the effects of deadlines and discounting in a standard endogenous leadership model. We show that there will be occasional changes in the identity of the price leader with any cost of delay or discounting, however small. By analyzing the incentives that induce a firm to take up the leader position we derive positive predictions about which firm will lead most price changes.

Keywords: Endogenous timing; Price leadership; War of attrition (search for similar items in EconPapers)
JEL-codes: L13 (search for similar items in EconPapers)
Date: 2001-11
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