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On the counter-cyclicality of prices and markups in a Cournot model of entry

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  • Plehn-Dujowich, Jose M.

Abstract

We prove in a Cournot model that the price and markup are counter-cyclical due to changes in the extent of competition if the income effect is decreasing in the price, as occurs when preferences are homothetic or demand is isoelastic.

Suggested Citation

  • Plehn-Dujowich, Jose M., 2008. "On the counter-cyclicality of prices and markups in a Cournot model of entry," Economics Letters, Elsevier, vol. 99(2), pages 310-313, May.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:2:p:310-313
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    Cited by:

    1. Gyun Cheol Gu, 2015. "Why Have U.S. Prices Become Independent of Business Cycles?," Metroeconomica, Wiley Blackwell, vol. 66(4), pages 661-685, November.

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