Loss Leading as an Exploitative Practice

• 成果类型: Article
• 署名作者: Chen, Zhijun; Rey, Patrick
• 署名单位: University of Auckland; Institut Polytechnique de Paris; Ecole Polytechnique; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.102.7.3462
• 发表日期: 2012
• 页码: 3462-3482
• 关键词: patterns; MARKET

摘要

We show that large retailers competing with smaller stores that carry a narrower range, can exercise market power by pricing below cost some of the products also offered by the smaller rivals, in order to discriminate multistop shoppers from one-stop shoppers. Loss leading thus appears as an exploitative device rather than as an exclusionary instrument, although it hurts the smaller rivals as well; banning below-cost pricing increases consumer surplus, rivals' pro fits, and social welfare. Our insights extend to industries where established firms compete with entrants offering fewer products. They also apply to complementary products such. as platforms and applications.