Competition with list prices

• 成果类型: Article
• 署名作者: Haan, Marco A.; Heijnen, Pim; Obradovits, Martin
• 署名单位: University of Groningen; University of Innsbruck
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.04.012
• 发表日期: 2023
• 页码: 502-528
• 关键词: List prices; Recommended retail prices; Price competition; price dispersion; Advertising

摘要

Retail prices in stores are often lower than widely advertised list prices. We study the competitive role of such list prices in a homogeneous product duopoly where firms first set list prices before setting possibly reduced retail prices. Building on Varian (1980), we assume that some consumers observe no prices, some observe all prices, and some only observe the more salient list prices. We show that when the latter group chooses myopically, firms' ability to use list prices lowers average transaction prices. This effect is weakened when these consumers are rational. The possibility to use list prices facilitates collusion.(c) 2023 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons .org /licenses /by /4 .0/).