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

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10.1016/j.ijindorg.2009.10.005

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).
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Price dynamics and collusion under short-run price commitments

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Price dynamics and collusion under short-run price commitments

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