THE DISTRIBUTION OF PRICE CHANGES IN OLIGOPOLY

Econometric analysis of the skew of price change distributions for an eighty industry sample over an eleven year period indicates that the d istributions are less skewed in times of rapidly changing prices, in c oncentrated oligopolies and in markets with little product heterogenei ty. The results provide evidence of less price staggering and greater pricing coordination by firms in times of high inflation and in oligop olistic markets respectively. Tight oligopolies also appear to have mo re symmetric distributions when prices are falling than when they are rising, suggesting that price decreases are more readily followed than increases.