Dynamic Price Competition, Learning-by-Doing, and Strategic Buyers
          
                  Andrew Sweeting, Dun Jia, Shen Hui, Xinlu Yao
      
  
, 
            4
      (    
                  112
      
  
)
            American Economic Review
      
            1311-1333
      
            April
      
            2022
      
            aer.20202016ASweeting.pdf1.78 MB
          
                          
      
  
  Abstract
              We examine how strategic buyer behavior affects equilibrium outcomes in a model of dynamic price competition where sellers benefit from learning-by-doing by allowing each buyer to expect to capture a share of future buyer surplus. Many equilibria that exist when buyers consider only their immediate payoffs are eliminated when buyers expect to capture even a modest share of future surplus, and the equilibria that survive are those where long-run market competition is more likely to be preserved.