Edgeworth cycles revisited
By: Joseph J. Doyle, Jr., Erich Muehlegger, Krislert Samphantharak.
Contributors: Muehlegger, Erich.; Samphantharak, Krislert.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 14162; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 14162.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Some gasoline markets exhibit remarkable price cycles, where price spikes are followed by a string of small price declines until the next price spike.  This pattern is predicted from a model of competition driven by Edgeworth cycles, as described by Maskin and Tirole.  We extend the Maskin and Tirole model and empirically test its predictions with a new dataset of daily station-level prices in 115 US cities.  One innovation is that we also examine cycling within cities, which allows controls for city fixed effects.  Consistent with the theory, and often in contrast with previous empirical work, we find that the least and most concentrated markets are much less likely to exhibit cycling behavior; and the areas with more independent retailers that have convenience stores are more likely to cycle.  We also find that the average gasoline prices are relatively unrelated to cycling behavior"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 7/23/2008.

Includes bibliographical references.

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