Abstract
This paper studies the evolutionary stability of a unique Nash equilibrium in a price dispersion model (Burdett and Judd, 1983) using gradient dynamics. The numerical solution to the partial differential equation that governs the evolution of prices shows that the stationary equilibrium is not a Nash Equilibrium and that it differs from the cyclical behavior predicted by another family of dynamics, such as replicator and logit, in a continuous action space.
| Original language | English |
|---|---|
| Pages (from-to) | 32-42 |
| Number of pages | 11 |
| Journal | Journal of Economic Dynamics and Control |
| Volume | 84 |
| DOIs | |
| Publication status | Published - 1 Nov 2017 |
| Externally published | Yes |
Keywords
- Evolutionary dynamics
- Gradient dynamics
- Population games
- Price dispersion
Cite this
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On the dynamic stability of a price dispersion model using gradient dynamics. / Rabanal, Jean Paul; Lee, Dongwook.
In: Journal of Economic Dynamics and Control, Vol. 84, 01.11.2017, p. 32-42.Research output: Contribution to journal › Article › Research › peer-review
TY - JOUR
T1 - On the dynamic stability of a price dispersion model using gradient dynamics
AU - Rabanal, Jean Paul
AU - Lee, Dongwook
PY - 2017/11/1
Y1 - 2017/11/1
N2 - This paper studies the evolutionary stability of a unique Nash equilibrium in a price dispersion model (Burdett and Judd, 1983) using gradient dynamics. The numerical solution to the partial differential equation that governs the evolution of prices shows that the stationary equilibrium is not a Nash Equilibrium and that it differs from the cyclical behavior predicted by another family of dynamics, such as replicator and logit, in a continuous action space.
AB - This paper studies the evolutionary stability of a unique Nash equilibrium in a price dispersion model (Burdett and Judd, 1983) using gradient dynamics. The numerical solution to the partial differential equation that governs the evolution of prices shows that the stationary equilibrium is not a Nash Equilibrium and that it differs from the cyclical behavior predicted by another family of dynamics, such as replicator and logit, in a continuous action space.
KW - Evolutionary dynamics
KW - Gradient dynamics
KW - Population games
KW - Price dispersion
UR - http://www.scopus.com/inward/record.url?scp=85032659441&partnerID=8YFLogxK
U2 - 10.1016/j.jedc.2017.08.007
DO - 10.1016/j.jedc.2017.08.007
M3 - Article
AN - SCOPUS:85032659441
VL - 84
SP - 32
EP - 42
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
SN - 0165-1889
ER -