Please use this identifier to cite or link to this item:
https://hdl.handle.net/1822/68307
Title: | National pricing with local quality competition |
Author(s): | Gabrielsen, Tommy Staahl Johansen, Bjørn Olav Straume, Odd Rune |
Keywords: | National pricing local pricing retail chains price and quality competition |
Issue date: | 2020 |
Publisher: | Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
Abstract(s): | We study the incentives of national retail chains to adopt national (uniform) prices across local markets that differ in size and competition intensity. In addition to price, the chains may also compete along a quality dimension, and quality is always set locally. We show that absent quality competition, the chains will never use national pricing. However, if quality competition is sufficiently strong there exist equilibria where at least one of the chains adopts national pricing. We also identify cases in which national pricing benefits (harms) all consumers, even in markets where such a pricing strategy leads to higher (lower) prices. |
Type: | Working paper |
URI: | https://hdl.handle.net/1822/68307 |
Publisher version: | https://www.eeg.uminho.pt/pt/investigar/nipe/Paginas/publicacoes.aspx |
Access: | Open access |
Appears in Collections: | NIPE - Documentos de Trabalho |
Files in This Item:
File | Description | Size | Format | |
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WP 09.2020.pdf | National pricing with local quality competition | 2,68 MB | Adobe PDF | View/Open |