The Kinked Demand Model and the Stability of Cooperation
This paper revisits a particular behaviour for firms competing in imperfect competitive markets, underlying the well known model of kinked demand curve. We show that under some symmetry and regularity conditions, this asymmetric behaviour of firms sustains monopoly pricing, and possesses therefore some "rationality" interpretation. We also show that such a behaviour can be generalized and interpreted as a norm of behaviour that sustains efficient outcomes in a more general class of symmetric games.
|Date of creation:||2009|
|Date of revision:||2009|
|Contact details of provider:|| Web page: http://www.econ.uniurb.it/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:urb:wpaper:09_05. 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: (Carmela Nicoletti)
If references are entirely missing, you can add them using this form.