An Evolutionary Analysis of Varian’s Model of Sales

An Evolutionary Analysis of Varian’s Model of Sales

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Article ID: iaor2012962
Volume: 2
Issue: 1
Start Page Number: 71
End Page Number: 96
Publication Date: Mar 2012
Journal: Dynamic Games and Applications
Authors:
Keywords: game theory, simulation: applications
Abstract:

Following Varian (1980) I study a model in which shops compete for two different types of customer, informed and uninformed. I show that under these assumptions price cycles can occur and also show that these cycles are attracting. It turns out that these cycles do not have to correspond with the best response cycle for the game. But as simulations for higher dimensions suggest the occurring cycle is always unique.

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