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    Cost of delay and endogenous price leadership


    Pastine, Tuvana (2004) Cost of delay and endogenous price leadership. International Journal of Industrial Organization, 22. pp. 135-145. ISSN 0167-7187

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    Abstract

    We study the effects of discounting in a standard endogenous price leadership model. We show that there will be occasional changes in the identity of the leader with any cost of delay or discounting, however small. By analyzing the incentives that induce a firm to take up the leader position, we derive positive predictions about which firm will lead most price changes. Firms with shorter reaction times will be more likely to become the price leader, as will firms with lower cost of delay if the firms’ reaction times are similar.

    Item Type: Article
    Keywords: Endogenous timing; Price leadership; War of attrition;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 8500
    Identification Number: https://doi.org/10.1016/j.ijindorg.2003.05.001
    Depositing User: Tuvana Pastine
    Date Deposited: 25 Jul 2017 12:38
    Journal or Publication Title: International Journal of Industrial Organization
    Publisher: Elsevier
    Refereed: Yes
    URI:

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