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Kinked norms of behaviour and cooperation

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  • Currarini, Sergio
  • Marini, Marco

Abstract

This paper revisits a particular norm of behaviour underlying the well known model of kinked demand. We show that under some standard regularity conditions this norm of behaviour sustains the efficient outcome in all symmetric games.

Suggested Citation

  • Currarini, Sergio & Marini, Marco, 2011. "Kinked norms of behaviour and cooperation," Economics Letters, Elsevier, vol. 110(3), pages 223-225, March.
    • Handle: RePEc:eee:ecolet:v:110:y:2011:i:3:p:223-225
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    References listed on IDEAS

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    1. Paul M. Sweezy, 1939. "Demand Under Conditions of Oligopoly," Journal of Political Economy, University of Chicago Press, vol. 47, pages 568-568.
    2. 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.
    3. R. L. Hall & C. J. Hitch, 1939. "Price Theory And Business Behaviour," Oxford Economic Papers, Oxford University Press, vol. 0(1), pages 12-45.
    4. 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.
    5. George J. Stigler, 1947. "The Kinky Oligopoly Demand Curve and Rigid Prices," Journal of Political Economy, University of Chicago Press, vol. 55, pages 432-432.
    6. Bhaskar, V., 1988. "The kinked demand curve: A game-theoretic approach," International Journal of Industrial Organization, Elsevier, vol. 6(3), pages 373-384.
    7. T. Marschak & R. Selten, 1978. "Restabilizing Responses, Inertia Supergames, and Oligopolistic Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(1), pages 71-93.
    8. Domberger, Simon, 1979. "Price Adjustment and Market Structure," Economic Journal, Royal Economic Society, vol. 89(353), pages 96-108, March.
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    More about this item

    Keywords

    Kinked demand Symmetric games Social norms of behaviour;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D2 - Microeconomics - - Production and Organizations
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D6 - Microeconomics - - Welfare Economics
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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