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On the strategic choice of spatial price policy: the role of the pricing game rules

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Author Info
Iñaki Aguirre () (Universidad del Pais Vasco)
Ana M. Martin () (Universidad del Pais Vasco)

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Abstract

The strategic choice of spatial price policy under duopoly crucially depends on the rules of price competition. We show that under simultaneous price competition and under leader-follower price competition (with the discriminatory firm being the leader), the pricing policy game is not, as stated by Thisse and Vives (1988), a Prisoner's Dilemma.

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File URL: http://www.economicsbulletin.com/2001/volume12/EB-01L10002A.pdf
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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 12 (2001)
Issue (Month): ()
Pages: 1-7
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:eb-01l10002

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Related research
Keywords: mill pricing; spatial competition; spatial price discrimination;

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Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
D4 - Microeconomics - - Market Structure and Pricing

References listed on IDEAS
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  1. Thisse, Jacques-Francois & Vives, Xavier, 1992. "Basing Point Pricing: Competition versus Collusion," Journal of Industrial Economics, Blackwell Publishing, vol. 40(3), pages 249-60, September. [Downloadable!] (restricted)
    Other versions:
  2. Lederer, Phillip J & Hurter, Arthur P, Jr, 1986. "Competition of Firms: Discriminatory Pricing and Location," Econometrica, Econometric Society, vol. 54(3), pages 623-40, May. [Downloadable!] (restricted)
  3. Hummels, David & Levinsohn, James A, 1993. "Product Differentiation as a," American Economic Review, American Economic Association, vol. 83(2), pages 445-49, May. [Downloadable!] (restricted)
  4. Edward C. Prescott & Michael Visscher, 1977. "Sequential Location among Firms with Foresight," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 378-393, Autumn. [Downloadable!] (restricted)
  5. Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Blackwell Publishing, vol. 53(1), pages 1-26, January. [Downloadable!] (restricted)
  6. Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
  7. Hurter, Arthur Jr & Lederer, Phillip J., 1985. "Spatial duopoly with discriminatory pricing," Regional Science and Urban Economics, Elsevier, vol. 15(4), pages 541-553, November. [Downloadable!] (restricted)
  8. Thisse, Jacques-Francois & Vives, Xavier, 1988. "On the Strategic Choice of Spatial Price Policy," American Economic Review, American Economic Association, vol. 78(1), pages 122-37, March. [Downloadable!] (restricted)
    Other versions:
  9. Maria Paz Espinosa, 1992. "Delivered Pricing, FOB Pricing, and Collusion in Spatial Markets," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 64-85, Spring. [Downloadable!] (restricted)
  10. Eber, Nicolas, 1997. "A note on the strategic choice of spatial price discrimination," Economics Letters, Elsevier, vol. 55(3), pages 419-423, September. [Downloadable!] (restricted)
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