97273 20210902121610.0 doi 10.1007/s00191-019-00645-8 sideral 115322 ART-2020-115322 eng Almudí, Isabel Universidad de Zaragoza (orcid)0000-0003-3766-9157 Pricing routines and industrial dynamics 2020 Access copy available to the general public Unrestricted We propose an evolutionary model in which boundedly rational firms compete and learn in a dynamic oligopoly with imperfect information and evolving degrees of market power. Firms in the model set prices according to routines, and try to make profits by capturing market share. The model can be extended to deal with heterogeneous costs and technological advance. The demand side of the market is composed of boundedly rational consumers who are capable of adapting to changing market options. Supply-demand interactions can be represented through a population dynamics model from which prices and market structures emerge. We obtain closed-form and simulation results which we interpret and compare with benchmark results from a standard non-cooperative game (Bertrand). When we compare the results with the Bertrand setting, we find a surprising result. Whereas in the fully rational Bertrand setting, firms either lower prices and erode their extra profits, or try to cooperate in a collusive equilibrium that is detrimental for consumer welfare, in the evolutionary setting firms make substantial profits, compete by adjusting prices, and the dynamics improve consumer welfare. From these results we claim that, instead of treating market power, externalities, and asymmetric information as market failures, we should consider them as essential traits of market competition. We argue that neo-Schumpeterian models incorporate all of these features together, thus leading towards a more realistic price theory for market economies. info:eu-repo/semantics/openAccess All rights reserved http://www.europeana.eu/rights/rr-f/ 2.343 2020 ECONOMICS 140 / 376 = 0.372 2020 Q2 T2 0.767 2020 Economics and Econometrics 2020 Q1 Business, Management and Accounting (miscellaneous) 2020 Q1 info:eu-repo/semantics/article info:eu-repo/semantics/acceptedVersion Fatás Villafranca, Francisco Universidad de Zaragoza (orcid)0000-0002-1246-6751 Palacio, Jesús Sánchez Chóliz, Julio Universidad de Zaragoza (orcid)0000-0001-9521-4156 4000 415 Universidad de Zaragoza Dpto. Análisis Económico Área Fund. Análisis Económico 30, 3 (2020), 705–739 J. evol. econ. JOURNAL OF EVOLUTIONARY ECONOMICS 0936-9937 556143 http://zaguan.unizar.es/record/97273/files/texto_completo.pdf Postprint 305927 http://zaguan.unizar.es/record/97273/files/texto_completo.jpg?subformat=icon icon Postprint oai:zaguan.unizar.es:97273 articulos driver 2021-09-02-08:40:25 ARTICLE