A Further Test of the Kinky Oligopoly Demand Curve.

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 theref...

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Publicado en:American Economic Review Vol. 59; no. 5; pp. 971 - 976
Autor principal: Simon, Julian L.
Formato: Artículo
Publicado: American Economic Association Dec69
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: A Further Test of the Kinky Oligopoly Demand Curve.
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        au: Simon, Julian L.
        affil: Professor of Economics, Marketing, University of Illinois.
      su:
        Demand function
        Competition
        Oligopolies
        Decision trees
        Monopolies
        Bribery
        Profit
        Prices
      sug:
        subj:
          Demand function
          Competition
          Oligopolies
          Decision trees
          Monopolies
          Bribery
          Profit
          Prices
      ab: 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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    language: English
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