According to the existing empirical literature, the price and the exchanged quantity volatility observed in real-world markets may be explained in terms of the endogenous fluctuations generated by the presence of nonlinearities. We then replace with a sigmoid adaptive best response mechanism,...

We study the effect of a shock on firms’ costs in a general setting by considering both perfect and imperfect competition and a general cost function. We show that, counterintuitively, firms’ profits may increase with cost increases. We generalize Seade’s (1985) results by considering the...