Abstract
Following A Model of Sales by Varian (Am. Econ. Rev. 70(4):651–659, 1980) I study a model, in which shops compete for two different types of customer, informed and uninformed. I show that under these assumptions price cycles can occur and also show that these cycles are attracting. It turns out that these cycles do not have to correspond with the best response cycle for the game. But as simulations for higher dimensions suggest the occurring cycle is always unique.
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Hahn, M. An Evolutionary Analysis of Varian’s Model of Sales. Dyn Games Appl 2, 71–96 (2012). https://doi.org/10.1007/s13235-011-0031-6
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DOI: https://doi.org/10.1007/s13235-011-0031-6