Abstract: | Summary The endogeneous duopoly solution as put forward in the author's paper A Dynamic Duopoly Model (De Economist, 1970, pp. 458–490) is not refuted by the objections raised in the preceding article. The contention that the analysis is based on a reaction pattern in the sense of Launhardt neglects the interdepedence between induced and autonomous price changes as formulated in the price reaction functions. The equilibrium prices in a Launhardt model differ from the endogeneously determined equilibrium prices derived in the author's paper. Since the price reaction coefficients are reconsidered in each period by the duopolists, the dynamic process generates these coefficients endogeneously. |