IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v150y2017icp122-125.html
   My bibliography  Save this article

Edgeworth cycles with partial price commitment

Author

Listed:
  • de Roos, Nicolas

Abstract

The price commitment model of Maskin and Tirole (1988) provides an extensively cited foundation for Edgeworth cycles. We examine the viability of Edgeworth cycles when price commitment is partial in the sense that a subset of firms are committed to price in each period. If multiple firms are not committed in each period, then the existence of Edgeworth cycle equilibria requires a demanding convexity condition on the profit function.

Suggested Citation

  • de Roos, Nicolas, 2017. "Edgeworth cycles with partial price commitment," Economics Letters, Elsevier, vol. 150(C), pages 122-125.
    • Handle: RePEc:eee:ecolet:v:150:y:2017:i:c:p:122-125
    DOI: 10.1016/j.econlet.2016.11.023
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176516304839
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2016.11.023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert Clark & Jean-Fran?ois Houde, 2013. "Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 97-123, August.
    2. Nicolas de Roos & Vladimir Smirnov, 2020. "Collusion with intertemporal price dispersion," RAND Journal of Economics, RAND Corporation, vol. 51(1), pages 158-188, March.
    3. Michael D. Noel, 2008. "Edgeworth Price Cycles and Focal Prices: Computational Dynamic Markov Equilibria," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(2), pages 345-377, June.
    4. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles," Econometrica, Econometric Society, vol. 56(3), pages 571-599, May.
    5. Castanias, Rick & Johnson, Herb, 1993. "Gas Wars: Retail Gasoline Fluctuations," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 171-174, February.
    6. Nicolas de Roos & Hajime Katayama, 2013. "Gasoline Price Cycles Under Discrete Time Pricing," The Economic Record, The Economic Society of Australia, vol. 89(285), pages 175-193, June.
    7. Zhongmin Wang, 2009. "(Mixed) Strategy in Oligopoly Pricing: Evidence from Gasoline Price Cycles Before and Under a Timing Regulation," Journal of Political Economy, University of Chicago Press, vol. 117(6), pages 987-1030, December.
    8. Eckert, Andrew, 2003. "Retail price cycles and the presence of small firms," International Journal of Industrial Organization, Elsevier, vol. 21(2), pages 151-170, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yao, Yao & Zhang, Jianxiong & Fan, Xiaoqing, 2022. "Strategic pricing: An anti-encroachment policy of retailer with uncertainty in retail service," European Journal of Operational Research, Elsevier, vol. 302(1), pages 144-157.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Noel, Michael D. & Chu, Lanlan, 2015. "Forecasting gasoline prices in the presence of Edgeworth Price Cycles," Energy Economics, Elsevier, vol. 51(C), pages 204-214.
    2. Isakower, Sean & Wang, Zhongmin, 2014. "A comparison of regular price cycles in gasoline and liquefied petroleum gas," Energy Economics, Elsevier, vol. 45(C), pages 445-454.
    3. Tveito, Andreas, 2019. "Coordination and price leadership in an unregulated environment," Working Papers in Economics 4/19, University of Bergen, Department of Economics.
    4. Noel, Michael D., 2015. "Do Edgeworth price cycles lead to higher or lower prices?," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 81-93.
    5. David P. Byrne, Gordon W. Leslie, and Roger Ware, 2015. "How do Consumers Respond to Gasoline Price Cycles?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    6. Øystein Foros & Mai Nguyen-Ones & Frode Steen, 2021. "The Effects of a Day off from Retail Price Competition: Evidence on Consumer Behavior and Firm Performance in Gasoline Retailing," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 28(1), pages 49-87, January.
    7. Heijnen, Pim & Soetevent, Adriaan R., 2018. "Price competition on graphs," Journal of Economic Behavior & Organization, Elsevier, vol. 146(C), pages 161-179.
    8. Eibelshäuser, Steffen & Wilhelm, Sascha, 2017. "Markets Take Breaks: Dynamic Price Competition with Opening Hours," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168247, Verein für Socialpolitik / German Economic Association.
    9. Nicolas de Roos & Hajime Katayama, 2013. "Gasoline Price Cycles Under Discrete Time Pricing," The Economic Record, The Economic Society of Australia, vol. 89(285), pages 175-193, June.
    10. David P. Byrne, 2012. "Petrol Price Cycles," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 45(4), pages 497-506, December.
    11. Michael D. Noel, 2019. "Calendar synchronization of gasoline price increases," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 355-370, April.
    12. Arezoo Ghazanfari & Armin Razmjoo, 2022. "The Effect of Market Isolation on Competitive Behavior in Retail Petrol Markets," Sustainability, MDPI, vol. 14(13), pages 1-33, July.
    13. Sara Ellison & Christopher M. Snyder, 2014. "An Empirical Study of Pricing Strategies in an Online Market with High-Frequency Price Information," CESifo Working Paper Series 4655, CESifo.
    14. Beare, Brendan K. & Seo, Juwon, 2014. "Time Irreversible Copula-Based Markov Models," Econometric Theory, Cambridge University Press, vol. 30(5), pages 923-960, October.
    15. Seaton, Jonathan S. & Waterson, Michael, 2013. "Identifying and characterising price leadership in British supermarkets," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 392-403.
    16. Oystein Foros & Frode Steen, 2008. "Gasoline Prices Jump Up on Mondays: an Outcome of Aggressive Competition?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2008-20, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    17. David P Byrne & Jia Sheen Nah & Peng Xue, 2018. "Australia Has the World's Best Petrol Price Data: FuelWatch and FuelCheck," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 51(4), pages 564-577, December.
    18. Aljoscha Janssen, 2022. "Price dynamics of Swedish pharmaceuticals," Quantitative Marketing and Economics (QME), Springer, vol. 20(4), pages 313-351, December.
    19. Andreoli-Versbach, Patrick & Franck, Jens-Uwe, 2015. "Endogenous price commitment, sticky and leadership pricing: Evidence from the Italian petrol market," International Journal of Industrial Organization, Elsevier, vol. 40(C), pages 32-48.
    20. Mark Dijkstra & Maarten Pieter Schinkel, 2019. "State-aided Price Coordination in the Dutch Mortgage Market," Tinbergen Institute Discussion Papers 19-014/VII, Tinbergen Institute, revised 13 Jul 2019.

    More about this item

    Keywords

    Edgeworth cycles; Price commitment;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:150:y:2017:i:c:p:122-125. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.