LAUSR

This paper studies evolutionarily stable preferences of competing firms across independent markets. Two models are considered according to whether firms' preferences are discrete or continuous. When preferences are discrete, firms have two marketing strategies: profit maximization and revenue maximization. We find that, whether pure and mixed strategies are evolutionarily stable depends on the spectrum of pricing capability. When the pricing capability is moderate, the mixed strategy is an evolutionarily stable strategy. Revenue maximization is evolutionarily stable under relatively high pricing capability, whereas, in case of low pricing capability, firms opt to maximize their profits. Further, the stability of revenue preference is also examined under continuous preferences. We derive the conditions, under which a unique evolutionarily stable revenue preference appears as well as it is continuously stable. Our main results still hold when we extend our model to a general framework.