Asymmetric Adjustment in Menu Cost Duopoly
11 Pages Posted: 18 Sep 1996
Date Written: July 5, 1996
Contrary to existing menu cost models we assume oligopolistic interaction. Symmetric duopoly may lead to asymmetric adjustment even when menu costs are negligible: In some equilibria only one Orm adjusts to negative shocks, while both Orms adjust to positive shocks.
JEL Classification: D43,E31,L13
Suggested Citation: Suggested Citation