Can prices be insensitive to unit cost variations? A game-theoretic alternative to the kinked demand curve explanation

C-Tier
Journal: Economics Letters
Year: 2012
Volume: 116
Issue: 1
Pages: 89-91

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We provide a game-theoretic alternative of the kinked demand curve explanation of rigid prices. We analyze a duopoly where firms choose quantities and objectives. We identify cases under which firms choose to maximize their revenue. Under these cases, prices are insensitive to unit costs.

Technical Details

RePEc Handle
repec:eee:ecolet:v:116:y:2012:i:1:p:89-91
Journal Field
General
Author Count
2
Added to Database
2026-01-29