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A differential game model of a market of substitutable products
Author(s)
Date Issued
1996
ISSN
0377-2217
Citation
European Journal of Operational Research, May 1996, vol. 90(3), pp. 599-608.
Type
Peer Reviewed Journal Article
Abstract
Modern industrial organization often classifies groups of differentiated products that are fairly good substitutes to belong to the same market. This paper develops a differential game model of a market of substitutable products. To avoid the problem of time-inconsistency, we solve a feedback Nash equilibrium solution for the game. A set of state-dependent equilibrium strategies is derived. Extensions of the model to a stochastic formulation and to an infinite time horizon specification are also provided.
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