Note on the Kinky Oligopoly Demand Curve

In a recent article Professor George J. Stigler has discussed the theory of the kinky oligopoly demand curve and attempted to test empirically whether or not such curves really exist. His empirical evidence is divided into two parts: (1) histories of the prices quoted by the different firms in certain oligopolistic industries, intended to show whether it is a valid assumption that businessmen expect their competitors to follow them on price cuts but not on increases, and (2) studies of the degree of price flexibility in 19 oligopolistic industries, intended to show whether the facts conform to certain conclusions regarding price rigidity...