We consider a price setting duopoly producing differentiated goods, where the players can learn by doing and from each other. The unit production cost is modelled as a decreasing function of accumulated knowledge. The game is non-cooperative, played in a discrete time over an infinite horizon. Feedback Nash equilibrium strategies are sought. An algorithm to compute such equilibria is given and results of numerical experiments concerned with symmetric and asymmetric duopolies are reported.
Published July 1993 , 23 pages