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Price discrimination of buyers with identical preferences and collusion in a model of advertising

A MANDUCHI
2004 Journal of Economic Theory  
A model of advertising and price distributions is investigated whereby each seller can contact different buyers, whose preferences are identical, with different probabilities.  ...  This results in a lower expected utility for the buyers and higher expected profits; thus, identifying areas of influence can help the sellers to support collusion.  ...  The model There are an integer number m > 1 of ex-ante identical sellers of a homogeneous good, indexed by i, and a [0, 1] continuum of buyers with identical preferences. m is taken as given; a comment  ... 
doi:10.1016/s0022-0531(03)00301-6 fatcat:qxcfn4bsxzfl5pnosucuojgglm

Price-Matching Guarantees with Endogenous Search: A Market Experiment Approach

Hong Yuan, Aradhna Krishna
2011 Journal of Retailing  
In this paper, we use a market experiment approach to examine buyer search as well as sellers' pricing decisions in the presence versus absence of Price-Matching Guarantees.  ...  We use student subjects as well as real consumers in an interactive laboratory setting to trade with each other, acting as buyers and sellers.  ...  Since then, a number of studies have re-affirmed Implicit Collusion Theory in markets with symmetric sellers and informed buyers (e.g., Zhang 1995) .  ... 
doi:10.1016/j.jretai.2011.04.002 fatcat:tsgoi4qkljfqza3hbw3ndd4gne

The Nature of Services and the Implications for Competition Policy

Annemieke Karel
2004 Social Science Research Network  
Though 'services' is a very broad concept and any generalisations should be made with caution, it is widely acknowledged that services differ from goods in many respects.  ...  Alternative policy measures should recognise the importance and disciplining power of non-price competition and the fact that quality and reputation are the main variables in services competition.  ...  , p x the price of x and T any revenue from the sale of advertising A.  ... 
doi:10.2139/ssrn.547028 fatcat:jktwrpqy6bgcpdjteopqzofmua

Dynamic Duopoly with Best-Price Clauses

Monika Schnitzer
1994 The Rand Journal of Economics  
I examine the collusive potential of both clauses in a finite-horizon duopoly model with homogeneous durable goods.  ...  This article investigates best-price clauses as a strategic device to facilitate collusion in a dynamic duopoly game.  ...  Best-price clauses and collusion • It will be useful to start with the analysis of a special case of the model, in which there are only two periods and no entry of new consumers in the second period, i.e  ... 
doi:10.2307/2555861 fatcat:ccb3jc6i45coloav46p6p3shku

Assessment of competition commission of European Union and Singapore and its effect on new firms and consumer power

Mr Danjuma Naisla Hassan, Mr Habakuk Aboki, Mr Audu Anyesha Amos
2014 IOSR Journal of Economics and Finance  
However, after the American Sherman Act of 1890, this competition law was enacted in the law of many nations. E.g.  ...  Singapore 2004, UK 1998, etc, therefore this research tend to compare and give assessment of competition commission of Singapore and that of European Union and shows how the market power of the existing  ...  In a collusive situation, each of them will set a high price and get a small share of the total profits.  ... 
doi:10.9790/5933-03113239 fatcat:aoe4c2roujfdpacmc75igdy2wu

Paying for Express Checkout: Competition and Price Discrimination in Multi-Server Queuing Systems

Cary A. Deck, Erik O. Kimbrough, Steeve Mongrain
2013 Social Science Research Network  
We explore the market impact of the multi-server seller engaging in waiting cost-based-price discrimination by charging a premium for express checkout.  ...  We model competition between two firms selling identical goods to customers who arrive in the market stochastically.  ...  All data are available at the website of the corresponding author: https://sites. google.com/site/erikkimbrough/ Author Contributions Conceived and designed the experiments: CD EK.  ... 
doi:10.2139/ssrn.2357807 fatcat:pc55xwlcubhu5bj2tcw7demvyu

Paying for Express Checkout: Competition and Price Discrimination in Multi-Server Queuing Systems

Cary Deck, Erik O. Kimbrough, Steeve Mongrain, Daniel Houser
2014 PLoS ONE  
We explore the market impact of the multi-server seller engaging in waiting cost-based-price discrimination by charging a premium for express checkout.  ...  We model competition between two firms selling identical goods to customers who arrive in the market stochastically.  ...  All data are available at the website of the corresponding author: https://sites. google.com/site/erikkimbrough/ Author Contributions Conceived and designed the experiments: CD EK.  ... 
doi:10.1371/journal.pone.0092070 pmid:24667809 pmcid:PMC3965397 fatcat:o5rqb3pfmfekfmvpjxzl5bn4ei

Pricing on the Internet

A. Daripa
2001 Oxford review of economic policy  
It is argued that lower production costs of online retailers encourages new entry in previously concentrated sectors, and a marked reduction in search costs and switching costs increase the intensity of  ...  Many online markets tend to be advertising-intensive, creating a tendency towards concentration; search and price comparison are not perfect; firms can create product heterogeneity and raise switching  ...  (i) Price discrimination Consider a monopoly seller of an information good who faces a large market with heterogeneous buyers. The buyers differ in their valuation of this information good.  ... 
doi:10.1093/oxrep/17.2.202 fatcat:v6wl6nvbtzhydl4ltylbywcvqe

Empirical Studies of Product Markets [chapter]

Alan Kirman, Louis Phlips
1996 Economics in a Changing World  
Conjectural variations and market power 4. Price discrimination 5. Tacit collusion and the "Folk Theorem" 6. The lemons principle and efficiency 7.  ...  That is why Horowitz (1981) and Howell (1982) use a first-order autoregressive model of the price differences allowing adjustment to a common long-run price.  ...  Thus countries with higher cost domestic producers have higher prices, even with identical demand.  ... 
doi:10.1007/978-1-349-25168-1_13 fatcat:kid5be7d2vdi3aisdxtrzdccfu

Buyer Countervailing Power: A Survey of the Theory and Experimental Evidence

Bradley J. Ruffle
2005 Social Science Research Network  
There exists a considerable theoretical literature offering a range of sources of powerful buyers' ability to extract price discounts.  ...  The rise of mega-retailers and industry concentration levels has recently generated an interest among economists and antitrust policymakers in the effects of buyer countervailing power.  ...  An interesting implication of this model is that a ban on price discrimination facilitates tacit collusion in the output market and reduces consumer welfare.  ... 
doi:10.2139/ssrn.894664 fatcat:lmlnygy2yreq5htbj6r7dt2uke

Competition versus collusion: The impact of consumer inertia

Iwan Bos, Ronald Peeters, Erik Pot
2017 International Journal of Economic Theory  
These results provide a number of valuable insights with regard to competitive and collusive pricing behavior.  ...  We consider a model of dynamic price competition to analyze the impact of consumer inertia on the ability of firms to sustain high prices.  ...  because economic methods of cartel detection typically aim to discriminate between competitive and collusive pricing behavior. 6 Moreover, for a particular degree of consumer inertia, a credible and  ... 
doi:10.1111/ijet.12136 fatcat:cgczkh2kobdfvo6gf6oalw3cda

A view on the treatment of collusive and restrictive practices in competition policy

W. D. Reekie
1998 South African Journal of Economic and Management Sciences  
The best defence against collusion and restrictive practices in business is competition, but the Department of Health favours blanket rules like uniform pricing and a fixed fee-for-service.  ...  South African competition policy is in a state of flux.  ...  Thus identical prices with different costs (uniform price discrimination) cannot be touched by the legislation.  ... 
doi:10.4102/sajems.v1i1.1824 fatcat:bcy46ygcfzamhkpsvtkjerys74

Meet-the-competition clauses and the strategic disclosure of product quality

Cristián Troncoso-Valverde
2016 The B.E. Journal of Economic Analysis & Policy  
AbstractI examine the implications of meet-the-competition clauses (MCCs) for the strategic disclosure of product quality in a duopoly in which sellers can adopt these clauses before setting their prices  ...  I show that MCCs generate incentives for the disclosure of product quality because these clauses facilitate monopoly pricing in states of nature in which the quality of products is the same.  ...  Sepúlveda for discussion and helpful comments. I also thank an anonymous referee for very helpful feedback and suggestions that considerably improved the manuscript.  ... 
doi:10.1515/bejeap-2016-0140 fatcat:s2kj3evup5ad7pn5ctamnbfmgu

Behavior-based pricing under imperfectly informed consumers

Rosa-Branca Esteves, Sofia Cerqueira
2017 Information Economics and Policy  
We show that in comparison to no discrimination, ...rms reduce their advertising e¤orts, charge higher ...rst period prices and lower second period prices.  ...  When a ...rm is able to recognize customers with di¤erent purchasing histories, it may send them targeted advertisements with di¤erent prices.  ...  BBPD is employed in period 2. 2 the "reach"of their advertising, …rms learn the identity of informed consumers who bought from them in the past and send later advertising messages (henceforth ads) with  ... 
doi:10.1016/j.infoecopol.2017.06.007 fatcat:kilomaec75bp3ajkztmbjk7pvy

The Economics of Artificial Intelligence: A Survey

Laura Abrardi, Carlo Cambini, Laura Rondi
2019 Social Science Research Network  
The Centre is home to a large post-doctoral programme and hosts major research programmes, projects and data sets, in addition to a range of working groups and ad hoc initiatives.  ...  Moreover, as part of the EUI, the FSR works closely with the European Commission.  ...  Moreover, in a recent experiment (Calvano et al., 2019) , simple pricing algorithms are let to interact in a repeated pricing game with simultaneous moves and full price flexibility.  ... 
doi:10.2139/ssrn.3425922 fatcat:77uenwtwbnemnherz3soyit5wi
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