Asymmetric adjustment in symmetric duopoly

Per Svejstrup Hansen, Peter Møllgaard, Per Baltzer Overgaard, Jan Rose Sorensen

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Adjustments to unanticipated demand shocks in a symmetric, differentiated bertrand duopoly are analysed. Asymmetric adjustment may arise even when adjustment costs are negligible or absent: in some equilibria only one firm adjusts to negative shocks, while both firms adjust to positive shocks.
Original languageEnglish
Pages (from-to)183-188
JournalEconomics Letters
Issue number2
Publication statusPublished - Nov 1996
Externally publishedYes

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