TY - JOUR
T1 - Edgeworth price cycles and focal prices
T2 - Computational dynamic Markov equilibria
AU - Noel, Michael D.
PY - 2008
Y1 - 2008
N2 - Motivated by the apparent discovery of Edgeworth Cycles in many retail gasoline markets, this article extends the theory of Edgeworth Cycles along several key dimensions, including models of fluctuating marginal costs, differentiation, capacity constraints and triopoly. A computational approach to search for Markov perfect equilibria is taken. Edgeworth Cycles are found in equilibrium in many situations, and the shape of the cycles are found to carry information about underlying competitive intensity. Cycles in triopoly exhibit interesting coordination problems such as delayed starts and false starts.
AB - Motivated by the apparent discovery of Edgeworth Cycles in many retail gasoline markets, this article extends the theory of Edgeworth Cycles along several key dimensions, including models of fluctuating marginal costs, differentiation, capacity constraints and triopoly. A computational approach to search for Markov perfect equilibria is taken. Edgeworth Cycles are found in equilibrium in many situations, and the shape of the cycles are found to carry information about underlying competitive intensity. Cycles in triopoly exhibit interesting coordination problems such as delayed starts and false starts.
UR - http://www.scopus.com/inward/record.url?scp=43049124462&partnerID=8YFLogxK
U2 - 10.1111/j.1530-9134.2008.00181.x
DO - 10.1111/j.1530-9134.2008.00181.x
M3 - Article
AN - SCOPUS:43049124462
SN - 1058-6407
VL - 17
SP - 345
EP - 377
JO - Journal of Economics and Management Strategy
JF - Journal of Economics and Management Strategy
IS - 2
ER -