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Identifying Reaction Functions in a Differential Oligopoly Game with Sticky Prices

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  • L. Lambertini
  • A. Mantovani

Abstract

We investigate the issue of strategic substitutability/complementarity in a Cournot differential game with sticky prices. We show that first order conditions do not produce instantaneous best reply functions. However, we identify negatively sloped reaction functions in steady state, with the open-loop best reply being flatter than its closed-loop counterpart.

Suggested Citation

  • L. Lambertini & A. Mantovani, 2004. "Identifying Reaction Functions in a Differential Oligopoly Game with Sticky Prices," Working Papers 530, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:530
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