Arbeitspapier
Price guarantees, consumer search, and hassle costs
The paper deals with the competitive effects of price guarantees in a spatial duopoly where consumers can search for lower prices but have to incur hassle costs if they want to claim a price guarantee. It is shown that symmetric equilibria with and without price guarantees exist but price guarantees will have no effect on prices if search costs are low, hassle costs are high and the number of uninformed consumers is small. However, when both firms use price guarantees, there also exist payoff-dominant equilibria where both firms use mixed pricing strategies in the form of high-low pricing schemes, provided that the search costs are sufficiently high.
- Language
-
Englisch
- Bibliographic citation
-
Series: DIW Discussion Papers ; No. 1335
- Classification
-
Wirtschaft
Production, Pricing, and Market Structure; Size Distribution of Firms
Oligopoly and Other Imperfect Markets
Information and Product Quality; Standardization and Compatibility
Monopolization; Horizontal Anticompetitive Practices
- Subject
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Price Matching Guarantees
Search Costs
Oligopoly Pricing
- Event
-
Geistige Schöpfung
- (who)
-
Baake, Pio
Schwalbe, Ulrich
- Event
-
Veröffentlichung
- (who)
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Deutsches Institut für Wirtschaftsforschung (DIW)
- (where)
-
Berlin
- (when)
-
2013
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Baake, Pio
- Schwalbe, Ulrich
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2013
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