Journal of Economics and Management
 
  Volume 16, No. 1

 

March, 2020


   
 
 

A Differential Game Analysis of Free Entry Oligopoly with Sticky Prices


 
 

 
  Masahiko Hattori
 
 

Faculty of Economics, Doshisha University, Japan.


 
   
 
  Yasuhito Tanaka
 
  Faculty of Economics, Doshisha University, Japan.
 
   
 
   
 
 

Abstract


 






This study analyzes a free entry oligopoly under general demand and cost functions via a differential game approach. We consider an open-loop dynamic oligopoly and a memoryless closed-loop dynamic oligopoly with sticky prices. The results show under some assumptions that the number of firms at the steady state in the open-loop dynamic oligopoly is fewer than the number of firms in the static equilibrium, and that the number of firms in the memoryless closed-loop dynamic oligopoly is fewer than the number of firms in the open-loop dynamic oligopoly.



   

 


Keywords: free entry oligopoly; differential game; general demand function; general cost function; open-loop; memoryless closed-loop

 

JEL Classifications: C73, D43, L13.


 


 

   

 

   
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