Ambiguity and price competition

Routledge, R. R.; Edwards, R. A.

Abstract

© 2019, The Author(s). There are few models of price competition in a homogeneous-good market which permit general asymmetries of information amongst the sellers. This work studies a price game with discontinuous payoffs in which both costs and market demand are ex ante uncertain. The sellers evaluate uncertain profits with maximin expected utilities exhibiting ambiguity aversion. The buyers in the market are permitted to split between sellers tieing at the minimum price in arbitrary ways which may be deterministic or random. The role of the primitives in determining equilibrium prices in the market is analyzed in detail.

Citation

Routledge, R. R., & Edwards, R. A. (2019). Ambiguity and price competition. Theory and Decision, 1-26. https://doi.org/10.1007/s11238-019-09725-4

• Journal Article Type: Article
• Acceptance Date: Sep 30, 2019
• Online Publication Date: Nov 4, 2019
• Publication Date: Jan 1, 2019
• Deposit Date: Nov 26, 2019
• Publicly Available Date: Nov 26, 2019
• Journal: Theory and Decision
• Print ISSN: 0040-5833
• Electronic ISSN: 1573-7187
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• Pages: 1-26
• DOI: https://doi.org/10.1007/s11238-019-09725-4
• Keywords: Applied Psychology; Arts and Humanities (miscellaneous); General Economics, Econometrics and Finance; General Decision Sciences; General Social Sciences; Developmental and Educational Psychology; Computer Science Applications
• Public URL: https://nottingham-repository.worktribe.com/output/3418274
• Publisher URL: https://link.springer.com/article/10.1007/s11238-019-09725-4
• Additional Information: First Online: 4 November 2019