An Asymmetric Duopoly Model of Price Framing

Abstract: This note considers an asymmetric duopoly model of price-frame competition in homogeneous product markets. The firms choose simultaneously prices and price formats, and frame differentiation limits price comparability leading to consumer confusion. Here, one firm is more salient than its rival and attracts a larger share of confused consumers. In duopoly equilibrium, the firms randomize on both prices and frames, make strictly positive profits, and pricing is frame-independent. However, the prominent firm sets a higher average price and charges the monopoly price with positive probability. Higher prominence boosts expected profit for both the industry and the salient firm but may harm the rival’s expected profit.

Object Details

• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource
• Language: Englisch

References and Relationships

• Bibliographic citation: An Asymmetric Duopoly Model of Price Framing ; volume:19 ; number:2 ; year:2018 ; extent:7 ; The B.E. journal of theoretical economics ; 19, Heft 2 (2018) (gesamt 7)

Contributors, Places and Time

• Creator: Chioveanu, Ioana

Further information

• DOI: 10.1515/bejte-2018-0068
• URN: urn:nbn:de:101:1-2409011628120.647463035165
• Rights: Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 15.08.2025, 7:22 AM CEST