This paper analyzes price competition in an infinitely repeated duopoly game. In each period, consumers remember the existence and location of their previous supplier. New information is gathered via search or word-of-mouth communication. Market outcomes are history-dependent, and the Markov...

We analyze dynamic price competition in a homogeneous goods duopoly, where consumers exchange information via word-of-mouth communication. A fraction of consumers, who do not learn any new information, remain locked-in at their previous supplier in each period. We analyze Markov perfect...

We present a simple dynamic model to rationalize extended “panic buying” episodes. In our model, consumers compete for a scarce good. Scarcity is triggered by an anticipated negative supply shock that takes place in a single period with positive probability. To avoid the risk of...