IDEAS home Printed from https://ideas.repec.org/p/mac/wpaper/0402.html
   My bibliography  Save this paper

Speed of Price Adjustment with Price Conjecture

Author

Listed:
  • Dr Michael Olive

    (Department of Economics, Macquarie University)

Abstract

We derive a measure of firm speed of price adjustment that is directly inversely related to market power and compare this to the measure derived by Martin (1993). However, both measures are incorrect when firms have non-zero price conjectural variations and treat competing price levels as exogenous. This is because Taylor series expansions of the demand function implicitly assume that firms influence the level of competing prices in a way that is consistent with their conjectures.

Suggested Citation

  • Dr Michael Olive, 2004. "Speed of Price Adjustment with Price Conjecture," Research Papers 0402, Macquarie University, Department of Economics.
    • Handle: RePEc:mac:wpaper:0402
    as

    Download full text from publisher

    File URL: http://www.econ.mq.edu.au/research/2004/Olive_Mar04.pdf
    File Function: First Version, 2004
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Price adjustment; market power; conjectural variations;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mac:wpaper:0402. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Helen Boneham (email available below). General contact details of provider: https://edirc.repec.org/data/edmqqau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.