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Hotelling Model
Can someone help me with this task because calculating the initial price and the number of periods would be really important and should also be solvable with excel. Many thanks
Take the Hotelling model with the following ingredients:
S0 = 1000
r = 0.04
ct = 10 (for all t ≥ 0)
Dt(p) = 80 − p if p ≤ 80 and zero otherwise (again for all t ≥ 0)
We will refer to this as the baseline model. Solve for the initial price p0
Take the Hotelling model with the following ingredients:
S0 = 1000
r = 0.04
ct = 10 (for all t ≥ 0)
Dt(p) = 80 − p if p ≤ 80 and zero otherwise (again for all t ≥ 0)
We will refer to this as the baseline model. Solve for the initial price p0
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