A simple spatial model for Edgeworth cycles
Abstract
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
Collection
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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 ...
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