| Sumario: | Like Stigler's, these data on business magazines do not support the kinky oligopoly-demand-curve hypothesis. They give no indication that oligopolists change price less often than do monopolists, as the kinky-demand-curve hypothesis suggests they would. Institutional-organizational rigidities therefore can account for all the rigidity in rates. This does not prove that business men do not imagine a kinky-demand curve, but only that the sum effect of their mental demand curves plus the quickening effects of competition produces no less flexibility than does monopoly. What these data, together with Stigler's, do prove, I think, is that a deterministic function of any kind is quite inadequate to represent oligopolistic reality. What is needed is a decision tree that portrays the probabilities of the several possible outcomes and the payoffs in revenue and profit as perceived by the oligopolist.
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