Cyclical price fluctuations caused by information inertia : evidence from the German call-by-call telephone market

Arbeitspapier

The 2002 prices of suppliers in German call-by-call telephone market are rather dispersed, out-of-phase (uncorrelated), and show systematic down-up movements. In 2004, these prices are less dispersed, more in-phase and show more upwards runs than downs-ups. In both years, we clearly do not observe Edgeworth cycles where prices move in parallel (in-phase). We present a model with demand inertia, caused by incomplete information about prices, where (out-of-phase and in-phase) cycles as well as competitive equilibria and tacit collusion equilibria exist. The transition from the 2002 cycles in the German call-by-call market to more constant prices in 2004 may be due to parameter changes, such as customers possessing improved information.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 225

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
• Subject: Price cycles ; incomplete information ; telephone market ; Telekommunikationsgebühr ; Volatilität ; Cobweb ; Unvollkommene Information ; Konsumentenverhalten ; Informationsverhalten ; Theorie ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baier, Antje ; Bolle, Friedel
• Event: Veröffentlichung
• (who): European University Viadrina, Department of Business Administration and Economics
• (where): Frankfurt (Oder)
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/23798
• Last update: 10.03.2025, 11:43 AM CET