Research

Oligopolistic Pricing over the Deterministic Demand Cycle

Formulated a theory of self-enforcing collusion assuming a deterministic demand cycle. They predicted that under a self-enforcing non-cooperative pricing scheme, for any level of demand, the price in the rising part of the cycle would always be greater than the price in the falling part of the cycle. They also predicted that the path of collusive profits should reach its peak before market demand. We test their predictions using data from the Portland cement industry. The hypotheses are tested using a multi-equation system, differentiating the boom and the bust periods from 1974 to 1989. The results support both of Haltiwanger and Harrington’s hypotheses.

Publication Information
Article Title: Oligopolistic Pricing over the Deterministic Demand Cycle
Journal: International Journal of Industrial Organization (May, 2001)
v. 19 iss. 6 pp. 863-883
Author(s): Rosenbaum, David I;  Sukharomana, Supachat
Researcher Information
    
Rosenbaum, David I
Rosenbaum, David I
Associate Director of the Bureau of Business Research,
Expertise:
  • Forensic Economics
  • Applied Microeconomics
  • Cost-Benefit Analysis
Economics
CoB 525 J
P.O. Box 880489
University of Nebraska-Lincoln
Lincoln, NE 68588-0489, USA
Phone: (402) 472-2318
Fax: (402) 472-9700
drosenbaum1@unl.edu