Competition in Posted Prices with Stochastic Discounts
Bibliographic Data
| ID | 9708849 |
|---|---|
| Authors | David Gill (0000-0003-3319-8722, University of Oxford), John Thanassoulis (University of Warwick) |
| Year | 2016 |
| Volume | 126 |
| Issue | 594 |
| Pages | 1528-1570 |
| Publication date | 2016-08-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/ecoj.12294 |
| OpenAlex | W3123972960 |
| Language | EN |
| Citations received | 2 |
| References cited | 45 |
We study price competition between firms over public list or posted prices when a fraction of consumers can subsequently receive discounts with some probability. Such stochastic discounts are a feature of markets in which some consumers bargain explicitly and of markets in which sellers use the marketing practice of couponing. Even though bargainers receive reductions off the posted prices, the potential to discount dampens competitive pressure in the market, thus raising all prices and increasing profits. Welfare falls because of the stochastic nature of the discounts, which generates some misallocation of products to consumers. Stochastic discounts facilitate collusion by reducing the market share that can be gained from a deviation. \n \n
Business · Collusion · Competition (biology · Economics · Market economy · Market share · Microeconomics · Welfare · Auction Theory and Applications · Consumer Market Behavior and Pricing · Finance · Merger and Competition Analysis
| Unique citing works | 2 |
|---|---|
| Citations per year | 0,2 |
| Citation span | 2016 - 2024 (9) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 2 |