The model we discuss in this note is a re-examination of the classical Bertrand model of imperfect competition. the main difference is that consumers are allowed to have some strategic behavior when deciding from which one of the two sellers to buy. We will approach the resolution of the...

This paper proposes an aspiration-based model of bounded rationality, which is applied to a large-population context where agents are re-matched every period to play a Prisoner's Dilemma.