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Testing a Model of the Kinked Demand Curve

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  • Bhaskar, V
  • Machin, Stephen
  • Reid, G

Abstract

This paper analyzes survey data on the responses firms expect from their competitors when they change prices. There is evidence of an assymmetry in expected responses, which provides some support for modified versions of the kinked demand curve. The asymmetry in responses is found to be cyclically sensitive and to differ with certain firm characteristics. Copyright 1991 by Blackwell Publishing Ltd.

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  • Bhaskar, V & Machin, Stephen & Reid, G, 1991. "Testing a Model of the Kinked Demand Curve," Journal of Industrial Economics, Wiley Blackwell, vol. 39(3), pages 241-254, March.
    • Handle: RePEc:bla:jindec:v:39:y:1991:i:3:p:241-54
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    Cited by:

    1. Pazhanisamy, R., 2018. "Re examination of Kinked Demand Oligopoly Market: Theory, Evidence and Policy Implications from Lakshadweep," MPRA Paper 91176, University Library of Munich, Germany, revised 25 Dec 2018.
    2. Currarini, Sergio & Marini, Marco, 2011. "Kinked norms of behaviour and cooperation," Economics Letters, Elsevier, vol. 110(3), pages 223-225, March.
    3. Sen, Debapriya, 2004. "The kinked demand curve revisited," Economics Letters, Elsevier, vol. 84(1), pages 99-105, July.
    4. Knudsen, Eirik Sjåholm, 2019. "Bad weather ahead: Pre-recession characteristics and the severity of recession impact," Journal of Business Research, Elsevier, vol. 104(C), pages 118-130.

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