Edgeworth price cycles
Edgeworth price cycles refer to an asymmetric pattern of prices that result from a dynamic pricing equilibrium among competing oligopolists. The resulting time series takes on a sawtooth shape – many small price decreases interrupted only by occasional large price increases. Maskin and Tirole (1988) formalized the theory, and later extensions were provided by Eckert (2003) and Noel (2008). Edgeworth price cycles are the leading theory for explaining the asymmetric price cycles that appear in many US, Canadian, Australian and European retail gasoline markets (e.g. Noel (2007a), Eckert (2002), Doyle et al. (2010), Wang (2009b)). While the gasoline cycles continue to generate public concern with claims of collusion often raised, the current evidence favours Edgeworth price cycles being the result of stronger competition and the source of lower retail gasoline prices.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|This chapter was published in: Steven N. Durlauf & Lawrence E. Blume (ed.) , , pages , 2011, 1st quarter update.|
|This item is provided by Palgrave Macmillan in its series The New Palgrave Dictionary of Economics with number v:5:year:2011:doi:3849.|
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/|
|Order Information:|| Web: http://www.dictionaryofeconomics.com/help/faq#_Toc198623697 Email: |
When requesting a correction, please mention this item's handle: RePEc:pal:dofeco:v:5:year:2011:doi:3849. 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: (Sheeja Sanoj)
If references are entirely missing, you can add them using this form.