Bertrand-Edgeworth competition has recently been analyzed under imperfect buyer mobility, as a game in which, once prices are chosen, a static buyer subgame (BS) is played where the buyers choose which seller to visit (see, e.g., Burdett et al, 2001). Our paper considers a symmetric duopoly where two buyers play a two-stage BS of imperfect information after price setting. With prices su¢ ciently close, an equilibrium of the BS is characterized in which the buyers keep loyal if previously served. Conditional loyalty is proved to increase the Örmsímarket power: at the corresponding subgame perfect equilibrium of the entire game, the price is higher than that corresponding to the equilibrium of the BS in which the buyers are persistently randomizing.
|Titolo:||Conditional loyalty and its implications for pricing|
|Citazione:||De Francesco, M.A. (2018). Conditional loyalty and its implications for pricing.|
|Appare nelle tipologie:||5.13 Altro|
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|Conditional loyalty and its implications for pricing.pdf||paper sottoposto a rivista e depositato nel Munich Peronal RePec Archive||PDF editoriale||PUBBLICO - Pubblico senza Copyright||Open Access Visualizza/Apri|