Price Competition in an Inflationary Environment

Peter Dürsch and Thomas Eife ()

VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association

Abstract: A constant price level facilitates cooperation among firms whereas steady inflation and deflation rates lower firms' ability to cooperate. In an experimental market with price competition we show that both inflation and deflation signi cantly reduce cooperation compared to treatments with a constant price level. The diffi culties to cooperate also aff ect prices and welfare: depending on the market structure, inflation and deflation lead to signifi cantly lower real prices and higher welfare.

JEL-codes: C92 D43 E31 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-com, nep-exp and nep-mac
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Related works:
Journal Article: Price competition in an inflationary environment (2019)
Working Paper: Price Competition in an Inflationary Environment (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc14:100623

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