Kinked Demand Curve
Reference work entry
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.
KeywordsBertrand competition Collusion Cournot competition Duopoly Folk theorem Kinked demand curve Markov perfect equilibria Oligopoly Price rigidity Quick response equilibria Repeated games
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