The Distribution of Price Changes in Oligopoly.

Econometric analysis of the skew of price change distributions for an eighty industry sample over an eleven year period indicates that the distributions are less skewed in times of rapidly changing prices, in concentrated oligopolies, and in markets with little product heterogeneity. The results provide evidence of less price staggering and greater pricing coordination by firms in times of high inflation and in oligopolistic markets respectively. Tight oligopolies also appear to have more symmetric distributions when prices are falling than when they are rising, suggesting that price decreases are more readily followed than increases. Copyright 1993 by Blackwell Publishing Ltd.