Price dynamics and collusion under short-run price commitments

We consider a dynamic homogenous oligopoly in which firms set prices repeatedly. Theory predicts that short-run price commitments have an increasing impact on profits and may lead to less price stability. The experiments that we conduct provide support for the first effect and against the second effect when a random ending rule is applied. Application of a fixed ending rule seems to reverse these findings, but none of the effects is significant.

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Year of publication:	2008
Authors:	Kasper, Leufkens ; Ronald, Peeters
Institutions:	Graduate School of Business and Economics (GSBE), School of Business and Economics
Subject:	microeconomics

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Extent:	application/pdf
Series:	Research Memorandum.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Research Memoranda Number 052
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011160235