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Volume 2017, Article ID 9712626, 16 pages
Research Article

Implications for Firms with Limited Information to Take Advantage of Reference Price Effect in Competitive Settings

College of Economics and Management, Tianjin University, Tianjin 300072, China

Correspondence should be addressed to Zhanbing Guo; moc.361@0uggnibnahz

Received 4 November 2016; Revised 15 January 2017; Accepted 7 February 2017; Published 13 June 2017

Academic Editor: Mehrbakhsh Nilashi

Copyright © 2017 Junhai Ma and Zhanbing Guo. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This paper studies internal reference price effects when competitive firms face reference price effects and make decisions based on partial information, where their decision-making mechanism is modeled by a dynamic adjustment process. It is shown that the evolution of this dynamic adjustment goes to stabilization if both adjustment speeds are small and the complexity of this evolution increases in adjustment speeds. It is proved that the necessary condition for flip bifurcation or Neimark-Sacker bifurcation will occur with the increase of adjustment speed in two special cases. What is more, numerical simulations show that these bifurcations do occur. Then, the impacts of parameters on stability and profits are investigated and some management insights for firms with limited information to take advantage of reference price effects are provided.