A simple spatial model for Edgeworth cycles
Access Status
Open access
Authors
Bloch, Harry
Wills-Johnson, Nick
Date
2010Collection
Type
Working Paper
Metadata
Show full item recordAbstract
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.
Citation
Bloch, Harry and Wills-Johnson, Nick. 2010. A simple spatial model for Edgeworth cycles, Centre for Research in Applied Economics Working Paper Series: no. 201002, Curtin University of Technology, School of Economics and Finance.
Faculty
Curtin Business School
The Centre of Research in Applied Economics (CRAE)
School
School of Economics and Finance
Related items
Showing items related by title, author, creator and subject.
-
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 ...