A Reexamination of the Kinky Oligopoly Demand Curve.
Over 30 years have elapsed since the kinked demand curve was introduced as a theoretical hypothesis to explain oligopoly pricing behavior.[1] There have been no empirical studies confirming the pricing behavior predicted by the hypothesis, and two separate studies by G. Stigler and J. Simon have rej...
| Publicado en: | Journal of Political Economy Vol. 82; no. 4; pp. 851 - 863 |
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| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
University of Chicago Press
Jul/Aug74
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| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | Over 30 years have elapsed since the kinked demand curve was introduced as a theoretical hypothesis to explain oligopoly pricing behavior.[1] There have been no empirical studies confirming the pricing behavior predicted by the hypothesis, and two separate studies by G. Stigler and J. Simon have rejected the theory;[2] yet the kinky demand curve persists as the theory of oligopoly for many economists. Obviously there must be some explanation for the tenacity with which economists cling to the kinky demand curve. At least three possible explanations exist for the survival of the theory up to this time: (1) perhaps the profession has elected to ignore the previous empirical evidence rejecting the theory; (2) perhaps there are problems in the previous studies which make their results something less than conclusive; and (3) the profession (because of the second possibility) requires additional evidence prior to passing final judgment on the theory. Apparently the explanation is that there is a need to generate more empirical evidence and tests of the kinky demand curve theory; that is the main purpose of this paper. |
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