A simple spatial model for Edgeworth Cycles

Nick Wills-Johnson and Harry Bloch

Economics Letters, 2010, vol. 108, issue 3, 334-336

Abstract: Maskin and Tirole (1998) formalise Edgeworth's (1925) model of a dynamic equilibrium between two players where prices increase sharply and decrease slowly; the Edgeworth Cycle. Here, we present an application of the model, showing how Edgeworth Cycles might arise in a marketplace where spatial competition is important. We illustrate the approach using the example of retail gasoline markets where Edgeworth Cycles have been widely observed.

Keywords: Edgeworth; Cycles; Spatial; markets (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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