Chain-store pricing for strategic accommodation
Dobson, Paul and Waterson, Michael (2003) Chain-store pricing for strategic accommodation. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.677).
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Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served - price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with entry being inevitable in certain markets while being naturally or institutionally blockaded in others. We show that practising price discrimination is not always best for the chain-store. Competitive conditions exist under which uniform pricing can raise profits.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HF Commerce|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Chain stores, Commerce, Price discrimination, Price management, Pricing|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||April 2003|
|Number of Pages:||22|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Armstrong, M. and Vickers, J. (2001), “Competitive Price Discrimination”, RAND Journal of Economics, Vol. 32(4), pp. 579-605.
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