Strategic pricing of differentiated consumer durables in a dynamic duopoly: a numerical analysis

Fernando Nascimento*, Wilfried R. Vanhonacker

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    2 Citations (Scopus)

    Abstract

    Under different modes of competitive pricing behavior, profit‐maximizing price trajectories are derived for durable products in a dynamic duopoly. Open‐loop co‐operative and non‐cooperative pricing behavior is analyzed within a comprehensive model where sales of differentiated products are described by interlocked diffusion processes with realistic demand characteristics. Because of analytic complexity, the optimal trajectories implied by the control and differential‐game problems are derived numerically across an extensive set of plausible market scenarios. Manipulation of initial market conditions enables derivation of optimal competitive pricing as a function of timing of entry.

    Original languageEnglish
    Pages (from-to)193-220
    Number of pages28
    JournalManagerial and Decision Economics
    Volume14
    Issue number3
    DOIs
    Publication statusPublished - 1993

    Fingerprint

    Dive into the research topics of 'Strategic pricing of differentiated consumer durables in a dynamic duopoly: a numerical analysis'. Together they form a unique fingerprint.

    Cite this