Posting multiple prices to reduce the effectiveness of consumer price search
Ireland, Norman J.. (2007) Posting multiple prices to reduce the effectiveness of consumer price search. Journal of Industrial Economics, Vol.55 (No.2). pp. 235-263. ISSN 0022-1821Full text not available from this repository.
Official URL: http://dx.doi.org/10.1111/j.1467-6451.2007.00310.x
In a model of competition with imperfect consumer price information and incomplete price search, some consumers may end up comparing prices originating from the same supplier: either because one firm sets multiple prices or because a group of firms colludes. This leads to added monopoly power for these firms, and average prices in the mixed strategy equilibrium become higher. There is a shift in welfare from consumers to producers, both with exogenous and endogenous consumer search behaviour. However consumers might search more or less with multiple prices. The implications for the price-setting equilibrium, competition policy and recent judgements are considered.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HG Finance
H Social Sciences > HC Economic History and Conditions
|Divisions:||Faculty of Social Sciences > Economics|
|Journal or Publication Title:||Journal of Industrial Economics|
|Publisher:||Wiley-Blackwell Publishing Ltd.|
|Number of Pages:||29|
|Page Range:||pp. 235-263|
|Access rights to Published version:||Restricted or Subscription Access|
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