TY  - GEN
KW  - Bertrand Duopoly
KW  -  Inflation
KW  -  Experiment
KW  -  Money Illusion
ID  - heidok15325
T3  - Discussion Paper Series / University of Heidelberg, Department of Economics
Y1  - 2013/07//
TI  - Price Competition in an Inflationary Environment
AV  - public
N2  - We study how inflation and deflation affect firms' ability to cooperate in an experimental Bertrand duopoly with differentiated products. We find that there is significantly less cooperation in the treatments with inflation and deflation compared to the no-inflation treatments. The difficulties to cooperate affect prices and welfare: Depending on the market structure, inflation and deflation lead to significantly lower (real) prices and higher welfare.
UR  - https://archiv.ub.uni-heidelberg.de/volltextserver/15325/
EP  - 28
A1  - Duersch, Peter
A1  - Eife, Thomas
ER  -