An Experimental Examination Of Competitor Based Price Matching Guarantees
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An Experimental Examination Of Competitor Based Price Matching Guarantees
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Author : Shakun D. Mago
language : en
Publisher:
Release Date : 2006
An Experimental Examination Of Competitor Based Price Matching Guarantees written by Shakun D. Mago and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
We use experimental methods to demonstrate the anti-competitive potential of price matching guarantees in both symmetric and asymmetric cost duopolies. Our findings establish that when costs are symmetric, price-matching guarantees significantly increase market prices. In markets with cost asymmetries, guaranteed prices remain high relative to prices without the use of guarantees, but the overall ability of price guarantees to act as a collusion facilitating device becomes contingent on the relative cost difference. Lesser use of guarantees, combined with lower average prices and slower convergence to the collusive level, suggest that the mere presence of cost asymmetries may curtail collusive behavior.
Hassle Costs Price Matching Guarantees And Price Competition
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Author : Subhasish Dugar
language : en
Publisher:
Release Date : 2005
Hassle Costs Price Matching Guarantees And Price Competition written by Subhasish Dugar and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
In this study, we experimentally investigate whether the collusion-facilitating nature of price-matching guarantees survives the reasonable modification of hassle costs incurred by buyers to enact these guarantees. Hviid and Shaffer [1999] (HS) argue that the presence of an arbitrarily small number of positive hassle costs buyers undermines incentives for collusion in symmetric markets. To evaluate the impact of hassle costs, we develop four stylized one-shot price competition models that have sharp testable predictions. While the first model directly captures the implications of HS, the last three models deal with the theoretical analysis of hassle costs in symmetric markets by introducing varying proportions of positive and zero hassle costs buyers, previously unexplored in the literature. Although theory predicts that the competitive price should emerge in equilibrium in all four models, we find significant price differences in the experiment.
Are Low Prices Compromises Collusion Guarantees An Experimental Analysis Of Price Matching Policies
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Author : Enrique Fatas
language : en
Publisher:
Release Date : 2002
Are Low Prices Compromises Collusion Guarantees An Experimental Analysis Of Price Matching Policies written by Enrique Fatas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with categories.
In this paper we experimentally test the ability of Price-Matching Guarantees (PMG) to rise prices above the competitive level. We implement three different treatments of symmetric duopolies to check the effect of PMG both as a market institution and as a business strategy. In the absence of any low-price guarantee, prices get close to the Bertrand-Nash equilibrium although in the 50 rounds of the experiment no full convergence is obtained. The existence of PMG as an institution in a market where firms decide only about prices results in a clear collusive outcome as all markets quickly and fully converge to the collusive prediction. If we allow subjects to decide whether they adopt price matching or not we observe that almost all subjects decide to adopt PMG; prices significantly increases over the first treatment observed prices and are very close to the collusive ones.
Channel Strategies And Marketing Mix In A Connected World
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Author : Saibal Ray
language : en
Publisher: Springer Nature
Release Date : 2019-12-14
Channel Strategies And Marketing Mix In A Connected World written by Saibal Ray and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-12-14 with Business & Economics categories.
This book aims to revisit the “traditional” interaction between channel strategies and the marketing mix in a connected world. In particular, it focuses on the following four dimensions in this context: Consumers, Products, Value Proposition and Sustainability. Keeping in mind the growing digitalization of business processes in the retail world and the move towards omni-channel retailing, the book introduces the state-of-the-art academic and practitioner studies along these dimensions that could enhance the understanding of the potential impact that new technologies and strategies can have on practice in the near future. When launching a new product/service to market, firms usually consider various components of the marketing mix to influence consumers’ purchase behaviors, such as product design, convenience, value proposition, promotions, sustainability initiatives, etc. This mix varies depending on the specific channel and consumer niche that the firm is targeting. But this book shows how channel strategy also influences the effectiveness in utilizing the marketing mix to attract potential customers.
A Collection Of Surveys On Market Experiments
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Author : Charles Noussair
language : en
Publisher: John Wiley & Sons
Release Date : 2013-11-27
A Collection Of Surveys On Market Experiments written by Charles Noussair and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-11-27 with Business & Economics categories.
Comprised of 10 surveys by leading scholars, this collection showcases the largest and fastest growing strands of research on market behaviour in experimental economics. Covers topics such as asset markets, contests, environmental policy, frictions, general equilibrium, labour markets, multi-unit auctions, oligopoly markets, and prediction markets Focuses on the literature that has helped economists best understand how markets operate Assesses the impact of developments in theory, policy, and research methods
Handbook Of Game Theory And Industrial Organization Volume Ii
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Author : Luis C. Corchón
language : en
Publisher: Edward Elgar Publishing
Release Date : 2018
Handbook Of Game Theory And Industrial Organization Volume Ii written by Luis C. Corchón and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This second volume of the Handbook includes original contribution by experts in the field. It provides up-to-date surveys of the most relevant applications of game theory to industrial organization. The book covers both classical as well as new IO topics such as mergers in markets with homogeneous and differentiated goods, leniency and coordinated effects in cartels and mergers, static and dynamic contests, consumer search and product safety, strategic delegation, platforms and network effects, auctions, environmental and resource economics, intellectual property, healthcare, corruption, experimental industrial organization and empirical models of R&D.
Price Matching Guarantees In Homogenous Product Market And Equilibrium Selection Problem
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Author : Subhasish Dugar
language : en
Publisher:
Release Date : 2006
Price Matching Guarantees In Homogenous Product Market And Equilibrium Selection Problem written by Subhasish Dugar and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
Price-matching guarantees have been alleged to sustain collusive prices in a homogenous product market. Theories in this literature also suggest that there exists multiple equilibria (i.e., a set of price equilibria between the competitive and the monopoly price) when all sellers adopt these guarantees in such a market. Theoretical prediction in this case fails to pin down the actual behavior of players a priori. This paper illustrates the essential role of controlled experiment in testing the collusive theory of price matching guarantees and thereby shedding light on the embedded equilibrium selection problem. In particular, this paper studies two highly stylized market models, obtains testable predictions and lays out the design of the controlled experiment. Results indicate that these guarantees facilitate collusion among sellers and thus solve the equilibrium selection problem considerably.
The Effects Of Price Matching Guarantees On Prices
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Author : Subhasish Dugar
language : en
Publisher:
Release Date : 2006
The Effects Of Price Matching Guarantees On Prices written by Subhasish Dugar and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
This study reports experiments on two competing theories of price-matching guarantees (PMGs). The dominant view (Salop [1986]) in the literature suggests that PMGs can alter pricing incentives of firms and sustain anti-competitive outcome in the market. However, a recent theoretical extension (Hviid and Shaffer [1999]) argues that this anti-competitive outcome can be undermined if buyers incur costs in invoking these guarantees. Therefore, it is natural to wonder how these conclusions stand up empirically. In order to provide empirical evidence on the impact of PMGs on prices, we study a variety of stylized market models that capture the essence of the two theories, obtain testable predictions and lay out the design of the controlled experiment. Results indicate that in the absence of any hassle costs, PMGs can sustain the predicted collusive outcome. On the other hand, the presence of buyers who incur positive hassle costs significantly mitigates, though not fully as theory predicts, the price-facilitating power of PMGs. Our findings indicate that policy makers should heed the potentially anti-competitive effects of PMG related advertisements on prices.
Competitive Price Matching Guarantees
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Author : Arcan Nalca
language : en
Publisher:
Release Date : 2009
Competitive Price Matching Guarantees written by Arcan Nalca and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
Termination Of Price Wars
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Author : Michael Bungert
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06
Termination Of Price Wars written by Michael Bungert and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-06 with Business & Economics categories.
Michael Bungert investigates the possibility to terminate (non-beneficial) price wars through appropriate signals and analyzes the effect of different types of signals on the price reaction behaviour of a competitor. He demonstrates that all signal types show a significant effect on the probability of a co-operative price reaction.