Edgeworth cycles revisited
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Doyle_Edgeworth Cycles.pdf
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Author(s)
Doyle, Joseph J.
Muehlegger, Erich
Samphantharak, Krislert
Date Issued
September 2009
Journal
Energy Economics
Publisher
Elsevier B.V.
Citation
Doyle, Joseph, Erich Muehlegger, and Krislert Samphantharak. “Edgeworth Cycles Revisited.” Energy Economics 32.3 (2010) : 651-660.
Version
Author's final manuscript
Abstract
Some gasoline markets exhibit remarkable price cycles, where price spikes are followed by a series of small price declines: a pattern consistent with a model of Edgeworth cycles described by Maskin and Tirole. We extend the model and empirically test its predictions with a new dataset of daily station-level prices in 115 US cities. Consistent with the theory, and often in contrast with previous empirical work, we find the least and most concentrated markets are much less likely to exhibit cycling behavior both within and across cities; areas with more independent convenience-store gas stations are also more likely to cycle.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
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DOI of Published Version
https://doi.org/10.1016/j.eneco.2009.09.001
