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We study the evolution of prices set by duopolists who are uncertain about the perceived degree of product differentiation. Customers sometimes view the products as close substitutes, sometimes as highly differentiated. As the informativeness of the quantities sold increases with the price...
Persistent link: https://www.econbiz.de/10005187301
Many practitioners point out that the speculative profits of institutional traders arc eroded by the difficulty in gauging the price impact of their trades. In this paper. we develop a model of strategic trading where speculators face such a dilemma because of incomplete information about...
Persistent link: https://www.econbiz.de/10005518255