1,721,082 research outputs found
A Differential Oligopoly Game with Differentiated Goods and Sticky Prices
No full textWe investigate a dynamic oligopoly game where goods are differentiated and prices are sticky. We study the open-loop and the closed-loop memoryless Nash equilibrium, and show that the latter equilibrium entails a larger level of steady state production as compared to the former; both equilibria entail a larger level of production in steady state than the static game. We also study the effects of price stickiness and product differentiation upon the steady state equilibrium allocation and profits. The per-firm equilibrium output is increasing in both product differentiation and price stickiness, while profits are increasing in both product differentiation and the speed of price adjustment. The steady state social welfare monotonically increases in the speed of price adjustment, and the overproduction entailed by dynamic competition has beneficial effect from a social standpoint
Investire per un turismo di élite o di massa
No full textIn this paper we investigate the convenience for a destination to specialize in mass-tourism or in élite-tourism. We take a micro-economic dynamic perspective, and propose a theoretical model, able to explain the switch in this kind of specialization, which is easily observed in several cases. We also study the case in which it is possible for a destination to select a combination between mass – and élite – tourism and we characterize the optimal degree of composition between these two extreme case
R&D Incentives and Market Structure: A Dynamic Analysis
No full textWe investigate dynamic R&D for process innovation in an oligopoly where firms invest in cost-reducing activities. We focus on the relationship between R&D intensity and market structure, proving that the industry R&D investment monotonically increases in the number of firms. This Arrowian result contradicts the established wisdom acquired from static games on the same topic
Product and Process Innovation in Differential Games with Managerial Firms
No full textWe take a differential game approach to study the optimal choices of managerial firms concerning efforts in product an process innovation. We find the Nash equilibria under the open-loop and closed-loop information structure, and we compare the steady state allocations with the corresponding equilibria of markets populated by standard profit-maximising firms. We find that the managerial incentive leads firm to underinvest in product differentiation and to overinvest in process innovation, as compared to standard profit-maximising firms
R&D Incentives under Bertrand Competition: A Differential Game
No full textWe investigate dynamic R&D for process innovation in an oligopoly where firms invest in cost-reducing activities. We focus on the relationship between R&D intensity and market structure, proving that the industry R&D investment monotonically increases in the number of firms. This result contradicts the established wisdom acquired from static games on the same topic. We also prove that, if competition is sufficiently tough, any increase in product substitutability reduces R&D efforts
On the Dynamic Consistency of Optimal Monetary Policy
No full textThe literature on the time inconsistency of optimal monetary policy puts forward the idea that a central bank may strategically exploit the first mover advantage against the private sector, manipulating expectations so as to achieve a higher level of employment and output. We argue that this view is questionable. Once we take into account that expectations can not be considered as choice variables, and the rule of expectation formation is common knowledge to all players, there may not be room for time inconsistency of monetary policy any more
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