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:	Publisher
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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