Dynamic Price Competition, Learning-By-Doing and Strategic Buyers

Andrew Sweeting, Dun Jia, Shen Hui and Xinlu Yao

No 28272, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We generalize recent models of dynamic price competition where sellers benefit from learning-by-doing by allowing for long-lived strategic buyers, with a single parameter capturing the extent to which each buyer internalizes future buyer surplus. Many of the equilibria that exist when buyers are atomistic or myopic are eliminated when buyers internalize even a modest share of their effects on future surplus. The equilibria that survive tend to be those where long-run market competition is preserved.

JEL-codes: C73 D21 D43 L13 L41 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic and nep-reg
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Published as Andrew Sweeting & Dun Jia & Shen Hui & Xinlu Yao, 2022. "Dynamic Price Competition, Learning-by-Doing, and Strategic Buyers," American Economic Review, vol 112(4), pages 1311-1333.

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