IDEAS home Printed from https://ideas.repec.org/a/mhr/jinste/urnsici0932-4569(199812)1544_659praapa_2.0.tx_2-_.html
   My bibliography  Save this article

Price Rigidity and Asymmetric Price Adjustment in a Repeated Oligopoly

Author

Listed:
  • Richard Damania
  • Bill Z. Yang

Abstract

Recent empirical studies suggest that prices in highly concentrated industries tend to be rigid and that pricing is often asymmetric with price rises occurring more frequently than price reductions (Domberger [1987]). Existing explanations of price rigidity and asymmetric pricing assume that firms incur "menu costs" when they adjust their prices. There is, however, little empirical evidence to substantiate this assumption. This paper provides an alternative explanation for price rigidity as well as asymmetric price adjustment in the absence of menu costs. In an infinitely repeated duopoly with incomplete information, it is demonstrated that depending on the degree of collusion and parameters, a variety of pricing behaviour emerge in equilibrium.

Suggested Citation

  • Richard Damania & Bill Z. Yang, 1998. "Price Rigidity and Asymmetric Price Adjustment in a Repeated Oligopoly," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(4), pages 659-659, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(199812)154:4_659:praapa_2.0.tx_2-_
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Linda A. Toolsema & Jan P. A. M. Jacobs, 2007. "Why do prices rise faster than they fall? With an application to mortgage rates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 701-712.
    2. Jochen Meyer & Stephan Cramon-Taubadel, 2004. "Asymmetric Price Transmission: A Survey," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(3), pages 581-611.
    3. Frieder Mokinski & Nikolas Wölfing, 2014. "The effect of regulatory scrutiny: Asymmetric cost pass-through in power wholesale and its end," Journal of Regulatory Economics, Springer, vol. 45(2), pages 175-193, April.
    4. Ronald Johnson, 2002. "Search Costs, Lags and Prices at the Pump," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(1), pages 33-50, February.
    5. Obradovits, Martin, 2014. "Asymmetric Pricing Caused by Collusion," MPRA Paper 58889, University Library of Munich, Germany.
    6. repec:eee:jrpoli:v:52:y:2017:i:c:p:358-365 is not listed on IDEAS

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

    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:mhr:jinste:urn:sici:0932-4569(199812)154:4_659:praapa_2.0.tx_2-_. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert). General contact details of provider: https://www.mohr.de/jite .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.