This paper presents a model of price adjustment in replica economies with two consumer types and two goods. The model provides a trading rule that allows out-of-equilibrium trading and a decentralized price adjustment rule that features “learning through noisy imitation.” It is shown that for all sufficiently large economies, the process of experimentation and imitation favors adjustment of pri...

in this paper asymmetric price transmission mechanism and nonlinear adjustment between producer and retail prices of milk were examined in zanjan province of iran. for this purpose, a two-regime threshold vector error correction model (tvecm) and a sup-lm test developed by hansen and seo (2002) were employed for checking presence of a threshold effect. application of unit root tests indicated t...

Scarf (1960) proposed a market environment and a model of dynamic adjustment in .which the standard tatonnement price adjustment process orbits around, rather than converges to, the competitive equilibrium. Hirota ( 1981) characterized the price paths by the configuration of endowments. We explore the predictions of Scarf's model in a non­ tatonnement experimental double auction. We find that t...

Cooper (1986) examined the equilibrium of the retroactive most-favored-customer pricing policy by using a two-period duopoly model. He showed that the most-favoredcustomer policy enables both firms to offer higher prices and to enjoy higher profits. Neilson and Winter (1992) showed that even if one firm in a price-setting duopoly adopts the most-favored-customer policy, the equilibrium does not...

The paper discusses two partial equilibrium models, one is a synthetic model (GAPsi) and the other an econometrically estimated model (AG-MEMOD). While the synthetic model incorporates only price impacts and some shifts, the econometric model also reflects other influencing factors. Price formation includes policy measures as price wedges, or as explaining variables in key price equations or pr...

Spatial models of two-player competition in spaces with more than one dimensión almost never have pure-strategy Nash equilibria, and the study of the equilibrium positions, if they exist, yields a disappointing result: the two players must choose the same position to achieve equilibrium. In this work, a discrete game is proposed in which the existence of Nash equilibria is studied using a geome...

We study a model of firm price setting with customer markets and empirically evaluate its predictions. Our framework captures the dynamics of customers in response to a change in the price set by firms, describes the behavior of optimal prices in the presence of customer retention concerns, and delivers a general equilibrium model of price and customer dynamics. We exploit micro data on purchas...

A spatial price equilibrium model with information asymmetry in quality is developed in both static and dynamic versions. Producers at the supply markets are aware of the quality of their products, whereas consumers, located at the demand markets, are aware only of the average quality of the products that are shipped to their demand markets. Minimum quality standards are also captured in order ...

This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity b...