A simple spatial model for Edgeworth cycles
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Maskin & Tirole (1998) formalise Edgeworth's (1925) model of a dynamic equilibrium between two players where prices increase sharply and decrease slowly; the Edgeworth Cycle. Here, we present an application of the model, showing how Edgeworth Cycles might arise in a marketplace where spatial competition is important. We illustrate the approach using the example of retail gasoline markets where Edgeworth Cycles have been widely observed.
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Wills-Johnson, Nick (2010)This thesis examines the behaviour of retail petroleum markets, with a case study examining prices in Perth, Australia. The aim of the thesis is two-fold. Firstly, it aims to extend the Edgeworth Cycles literature by ...
Bloch, Harry; Wills-Johnson, Nick (2010)Gasoline prices in many markets follow a saw-toothed pattern known as an Edgeworth Cycle. Lewis (2009) introduces a novel way of measuring the shape of the cycle, the median change in price, and regresses this against a ...
Bloch, Harry; Wills-Johnson, Nick (2010)In many retail gasoline markets, prices follow a saw-toothed cycle first posited by Edgeworth (1925) and formalised by Maskin & Tirole (1988). A growing literature explores driving factors behind such cycles, most ...