Price dynamics and collusion under short-run price commitments

Kasper Leufkens and Ronald Peeters

International Journal of Industrial Organization, 2011, vol. 29, issue 1, 134-153

Abstract: We consider a dynamic homogeneous oligopoly in which firms set prices repeatedly. Theory predicts that short-run price commitments increase profits and may lead to less price stability. The experiments that we conducted provide support for the first effect and against the second effect when a random ending rule is applied. When a fixed ending rule is applied, we find no significant impact of short-run price commitments on profits and price stability.

Keywords: Short-run; price; commitments; Alternating-move; games; Collusion; Price; dynamics; Experiment (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (10)

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Working Paper: Price dynamics and collusion under short-run price commitments (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:29:y:2011:i:1:p:134-153

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