Edgeworth cycles revisited

Finding Edgeworth Cycles in Online Advertising Auctions

Search engines make a profit by auctioning off advertisement positions through keyword auctions. I examine the strategies taken by the advertisers. In a theoretical model, it is shown that the equilibrium bids should follow a cyclical pattern— “escalating” phases interconnected by “collapsing” phases— similar to a pattern of “Edgeworth Cycles” that was suggested by Edgeworth (1925) in a differe...

Price-Quantity Competition and Edgeworth Cycles

I consider markets in which eight firms compete deciding simultaneously on price and quantity with a given capacity. I got eight independent experimental data. At any of 65 rounds the same eight firms met each other in the same market. If a firm made high enough losses it went bankrupt and left the market. In this case capacity was distributed among surviving firms following a proportional prof...

Edgeworth Price Cycles in Gasoline: Evidence from the U.S

Studies of gasoline prices in multiple countries have found a repeated sequence of asymmetric cycles where a sharp price increase is followed by gradual decreases. This price pattern is linked to Maskin & Tirole’s (1988) theoretical duopoly pricing game that produces a similar pattern, Edgeworth price cycles. We examine data on average daily city-level retail gasoline and diesel prices for 355 ...

Schumpeter ’ s ‘ Business Cycles ’ Revisited

Hicks' trade cycle revisited: cycles and bifurcations

In the Trade Cycle, Hicks introduced the idea that endogenous fluctuations could be coupled with a growth process via nonlinear processes. To argue for this hypothesis, Hicks used a piecewise-linear model. This paper shows the need for a reinterpretation of Hicks’ contribution in the light of a more careful mathematical investigation. In particular, it will be shown that only one bound is neede...