Duopoly model

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  • This is a short book. It aims to get across the essential elements of dynamics that are used in modern treatments of the subject. More significantly, it aims to do this through the means of examples. Some of these examples are purely algebraic. But many others consider economic models: both microeconomic and macroeconomic. Macroeconomics is replete with dynamic models – some simple and others quite complex. But this is not true of microeconomics.

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  • The Santa Fe Institute (SFI) is interested in understanding evolving complex social, biological, and physical adaptive systems in a most general sense (see Cowan et al. 1994). Those of us at SFI interested in the evolution of social behavior have tended to focus on either small-scale societies or on specific aspects of more complex societies, such as the economy.

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  • The vast majority of U.S. residential consumers face a monopoly or duopoly in broadband Internet access. Until now, the Internet has been characterized by a regime of “net neutrality,” which means there has been no discrimination between the price of transmitting packets based on the identity of either the transmitter or the identity of the receiver, based on the application, or the type of content the packet contains.

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  • Some authors have modeled the multiproduct price competition in di erentiated goods where, as in our model, consumers can engage in mixing purchases between shops. Lal and Matutes (1989) have studied price competition in a duopoly selling two independent goods. They nd that in equilibrium retailers will charge di erent but deterministic prices and may even capture the entire consumer surplus of the less mobile consumers.

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