depends on the consumers’ rational price expectations from the recent past. By implication, demand responses are more elastic … for price increases than for price decreases and thus firms face a downward-sloping demand curve that is kinked at the … consumers’ reference price. Firms adjust their prices flexibly in response to variations in this demand curve, in the context of …

This study is the first to investigate the effect of demand rationing in experimental Bertrand-Edgeworth markets with … efficient demand rationing. Moreover, the amount of capacity available to each firm is varied. In accordance with earlier …