Price Competition Under Limited Comparability

• 成果类型: Article
• 署名作者: Piccione, Michele; Spiegler, Ran
• 署名单位: University of London; London School Economics & Political Science; Tel Aviv University; University of London; University College London
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjr053
• 发表日期: 2012
• 页码: 97-135
• 关键词: choice

摘要

This article studies market competition when firms can influence consumers' ability to compare market alternatives through their choice of price formats. In our model, the ability of a consumer to make a comparison depends on the firms' format choices. Our main results concern the interaction between firms' equilibrium price and format decisions and its implications for industry profits and consumer switching rates. In particular, market forces drive down the firms' profits to a constrained competitive benchmark if and only if the comparability structure satisfies a property that we interpret as a form of frame neutrality. The same property is necessary for equilibrium behavior to display statistical independence between price and format decisions. We also show that narrow regulatory interventions that aim to facilitate comparisons may have an anticompetitive effect.