The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Kinked Demand Curve

  • V. Bhaskar
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_781

Abstract

The kinked demand curve, one of the staples of oligopoly theory, was originally formulated as a theory of price rigidity. We review dynamic game-theoretic reformulations, which give rise to a theory of collusive price determination.

Keywords

Bertrand competition Collusion Cournot competition Duopoly Folk theorem Kinked demand curve Markov perfect equilibria Oligopoly Price rigidity Quick response equilibria Repeated games 
This is a preview of subscription content, log in to check access

Bibliography

  1. Anderson, R.M. 1988. Quick response equilibrium. Mimeo: University of California at Berkeley.Google Scholar
  2. Bhaskar, V. 1988. The kinked demand curve: A game theoretic approach. International Journal of Industrial Organization 6: 373–384.CrossRefGoogle Scholar
  3. Bhaskar, V., S. Machin, and G. Reid. 1991. Testing a model of the kinked demand curve. Journal of Industrial Economics 39: 241–254.CrossRefGoogle Scholar
  4. Hall, R., and C. Hitch. 1939. Price theory and business behavior. Oxford Economic Papers 2: 12–45.CrossRefGoogle Scholar
  5. Kalai, E., and M.A. Satterthwaite. 1986. The kinked demand curve, facilitating practices and oligopolistic competition. In Imperfections and behavior in economic organizations, ed. R.P. Gilles and P.H.M. Ruys. Boston: Kluwer.Google Scholar
  6. Maskin, E., and J. Tirole. 1988. A theory of dynamic oligopoly, II: Price competition, kinked demand curves, and Edgeworth cycles. Econometrica 56: 571–599.CrossRefGoogle Scholar
  7. Primeaux, W.J., and M.R. Bomball. 1974. A reexamination of the kinky oligopoly demand curve. Journal of Political Economy 82: 851–862.CrossRefGoogle Scholar
  8. Stigler, G. 1947. Kinky oligopoly demand and rigid prices. Journal of Political Economy 55: 432–449.CrossRefGoogle Scholar
  9. Sweezy, P. 1939. Demand under conditions of oligopoly. Journal of Political Economy 47: 568–573.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • V. Bhaskar
    • 1
  1. 1.