Publication:
List pricing and discounting in a Bertrand-Edgeworth duopoly

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorGarcía Díaz, Antón
dc.contributor.authorHernán, Roberto
dc.contributor.authorKujal, Praveen
dc.date.accessioned2012-07-19T17:40:28Z
dc.date.available2012-07-19T17:40:28Z
dc.date.issued2009-11
dc.description.abstractList, or retail, pricing is a widely used trading institution where firms announce a price that may be discounted at a later stage. Competition authorities view list pricing and discounting as a procompetitive practice. We modify the standard Bertrand–Edgeworth duopoly model to include list pricing and a subsequent discounting stage. Both firms first simultaneously choose a maximum list price and then decide whether to discount, or not, in a subsequent stage.We show that list pricing works as a credible commitment device that induces a pure strategy outcome. This is true for a general class of rationing rules. Further unlike the dominant firm interpretation of a price leader, the low capacity firm may have incentives to commit to a low price and in this sense assume the role of a leader.
dc.description.sponsorshipHernan and Kujal acknowledge financial support from Grant ECO2008-00977/ ECON from the Spanish Ministry of Education. Kujal acknowledges financial support from the Instituto Universitario de Economía, Consolider-Ingenio 2010 and the Comunidad de Madrid (grant Excelecon).
dc.description.statusPublicado
dc.format.mimetypeapplication/pdf
dc.identifier.bibliographicCitationInternational journal of industrial organization, v. 27, n. 6, nov. 2009, pp. 719-727
dc.identifier.doi10.1016/j.ijindorg.2009.03.002
dc.identifier.issn0167-7187
dc.identifier.publicationfirstpage719
dc.identifier.publicationissue6
dc.identifier.publicationlastpage727
dc.identifier.publicationtitleInternational journal of industrial organization
dc.identifier.publicationvolume27
dc.identifier.urihttps://hdl.handle.net/10016/14951
dc.language.isoeng
dc.publisherElsevier
dc.relation.publisherversionhttp:dx.doi.org/10.1016/j.ijindorg.2009.03.002
dc.rights©Elsevier
dc.rights.accessRightsopen access
dc.subject.ecienciaEconomía
dc.subject.jelL0
dc.subject.jelL1
dc.subject.jel4
dc.subject.jelL11
dc.subject.jelL13
dc.subject.otherList pricing
dc.subject.otherDiscounts
dc.subject.otherCapacity constrained models
dc.subject.otherMixed strategies
dc.subject.otherPure strategies
dc.subject.otherStackelberg leader
dc.titleList pricing and discounting in a Bertrand-Edgeworth duopoly
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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