Pro-competitive Price Beating Guarantees: Experimental Evidence
AbstractWe report experimental results on duopoly pricing with and without price beating guarantees (PBG). In two control treatments, price beating is either imposed as an industry-wide rule or offered as a business strategy. Our major finding is that when price beating guarantees are imposed as a rule or offered as an option, effective prices are equal to or lower than those in a baseline treatment in which price beating is forbidden. Also, when price beating is treated as a business strategy, less than 50% of subjects adopted the guarantee, suggesting that, subjects realize the pro-competitive effects of the guarantee. Copyright Springer 2005
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Bibliographic InfoArticle provided by Springer in its journal Review of Industrial Organization.
Volume (Year): 26 (2005)
Issue (Month): 1 (November)
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Web page: http://www.springerlink.com/link.asp?id=100336
experimental oligopolies; price beating guarantees;
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- Mago, Shakun Datta & Pate, Jennifer G., 2009.
"An experimental examination of competitor-based price matching guarantees,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 70(1-2), pages 342-360, May.
- Datta, Shakun & Offenberg, Jennifer, 2003. "An Experimental Examination of Competitor-Based Price Matching Guarantees," MPRA Paper 575, University Library of Munich, Germany, revised 22 Oct 2006.
- Enrique Fatas & Juan Mañez, 2007. "Are low-price promises collusion guarantees? An experimental test of price matching policies," Spanish Economic Review, Springer, vol. 9(1), pages 59-77, March.
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