Price dynamics and collusion under short-run price commitments

K. Leufkens; R.J.A.P. Peeters

doi:10.1016/j.ijindorg.2009.10.005

Price dynamics and collusion under short-run price commitments

K. Leufkens, R.J.A.P. Peeters^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

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.

Original language	English
Pages (from-to)	134-153
Number of pages	20
Journal	International Journal of Industrial Organization
Volume	29
Issue number	1
DOIs	https://doi.org/10.1016/j.ijindorg.2009.10.005
Publication status	Published - 1 Jan 2011

Access to Document

10.1016/j.ijindorg.2009.10.005

1 Working paper

Price dynamics and collusion under short-run price commitments
Leufkens, K. & Peeters, R. J. A. P., 1 Jan 2008, Maastricht: METEOR, Maastricht University School of Business and Economics, 35 p. (METEOR Research Memorandum; No. 052).
Research output: Working paper / Preprint › Working paper

Open Access
File

192 Downloads (Pure)

Cite this

@article{035fe71c663a4c09b4a030ad6b6fabad,

title = "Price dynamics and collusion under short-run price commitments",

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.",

author = "K. Leufkens and R.J.A.P. Peeters",

year = "2011",

month = jan,

day = "1",

doi = "10.1016/j.ijindorg.2009.10.005",

language = "English",

volume = "29",

pages = "134--153",

journal = "International Journal of Industrial Organization",

issn = "0167-7187",

publisher = "Elsevier Inc.",

number = "1",

}

TY - JOUR

T1 - Price dynamics and collusion under short-run price commitments

AU - Leufkens, K.

AU - Peeters, R.J.A.P.

PY - 2011/1/1

Y1 - 2011/1/1

N2 - 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.

AB - 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.

U2 - 10.1016/j.ijindorg.2009.10.005

DO - 10.1016/j.ijindorg.2009.10.005

M3 - Article

SN - 0167-7187

VL - 29

SP - 134

EP - 153

JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

IS - 1

ER -

Price dynamics and collusion under short-run price commitments

Abstract

Access to Document

Fingerprint

Research output

Price dynamics and collusion under short-run price commitments

Cite this