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This paper analyzes survey data on the responses firms expect from their competitors when they change prices. There is evidence of an assymmetry in expected responses, which provides some support for modified versions of the kinked demand curve. The asymmetry in responses is found to be...
Persistent link: https://www.econbiz.de/10005157719
Using Hotelling's model of locational competition, the author shows that a moderate price floor destroys the maximal differentiation equilibrium, resulting in minimum differentiation. Equilibrium prices are lower than prices in the absence of a floor. A low price floor can lead to multiple...
Persistent link: https://www.econbiz.de/10005193593