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Uniform Pricing Versus Mill Pricing

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  • Matthias Wrede

Abstract

This paper analyzes the coexistence of different pricing strategies. The purpose is to discuss how firms that are limited to uniform pricing affect the outcome of price competition among mill–price–setting firms. Price competition among (three) firms that are restricted to mill pricing is analyzed within the classic Hotelling framework and uniform–price–setting firms are considered as first movers. If uniform–price–setting firms deliver any good, they effectively separate mill–price–setting firms from each other. Finally, it is shown that price competition among first movers strengthens the effects of cross–type price competition.

Suggested Citation

  • Matthias Wrede, 2003. "Uniform Pricing Versus Mill Pricing," Journal of Regional Science, Wiley Blackwell, vol. 43(1), pages 167-179, February.
    • Handle: RePEc:bla:jregsc:v:43:y:2003:i:1:p:167-179
    DOI: 10.1111/1467-9787.00008
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    Cited by:

    1. Carriquiry, Miguel A. & Babcock, Bruce A., 2005. "The Impact of Transportation Costs on Spatial Competition of Grain Buyers: An Iowa Case Study," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 44(2).

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