Replication data for: How Efficient Is Dynamic Competition? The Case of Price as Investment
Principal Investigator(s): View help for Principal Investigator(s) David Besanko; Ulrich Doraszelski; Yaroslav Kryukov
Version: View help for Version V1
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| data | 12/07/2019 08:22:AM | ||
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Project Citation:
Besanko, David, Doraszelski, Ulrich, and Kryukov, Yaroslav. Replication data for: How Efficient Is Dynamic Competition? The Case of Price as Investment. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116206V1
Project Description
Summary:
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We study industries where the price that a firm sets serves as an investment into lower cost or higher demand. We assess the welfare implications of the ensuing competition for the market using analytical and numerical approaches to compare the equilibria of a learning-by-doing model to the first-best planner solution. We show that dynamic competition leads to low deadweight loss. This cannot be attributed to similarity between the equilibria and the planner solution. Instead, we show how learning-by-doing causes the various contributions to deadweight loss to either be small or partly offset each other.
Scope of Project
JEL Classification:
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D21 Firm Behavior: Theory
D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
L13 Oligopoly and Other Imperfect Markets
D21 Firm Behavior: Theory
D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
L13 Oligopoly and Other Imperfect Markets
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