Journal article
Barometric price leadership
International journal of industrial organization, Vol.15(3), pp.301-325
05/01/1997
DOI: 10.1016/0167-7187(95)01005-X
Abstract
Barometric price leadership refers to situations in which a price leader acts as a barometer of prevailing market conditions for other firms in the industry. In this paper, a model of price setting with costly information acquisition is analyzed. It is shown that the unique equilibrium outcome is for one firm to acquire information and become a price leader, while the other firm does not purchase information and becomes a follower. In contrast to most previous work, leadership in this model is due to the informational setting, not the price-setting mechanism as, with symmetric information, the unique outcome is the symmetric Bertrand equilibrium.
Details
- Title: Subtitle
- Barometric price leadership
- Creators
- David J. Cooper - University of Pittsburgh
- Resource Type
- Journal article
- Publication Details
- International journal of industrial organization, Vol.15(3), pp.301-325
- Publisher
- Elsevier B.V
- DOI
- 10.1016/0167-7187(95)01005-X
- ISSN
- 0167-7187
- eISSN
- 1873-7986
- Language
- English
- Date published
- 05/01/1997
- Academic Unit
- Economics
- Record Identifier
- 9984420938702771
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