Facilitating Practices: The Effects of Advance Notice and Best-Price Policies
AbstractEven if firms in a market choose discount prices noncooperatively, the use of most-favored customer and meet-or-release contracts enables those firms to adopt quantity-choice strategies. Consequently, there can be a range of list prices that are impervious to unilateral nonselective discounts, but this range does not include prices above the level determined in a Cournot equilibrium. The practice of advance public notification of list-price increases can facilitate the establishment of such supracompetitive list prices, as was argued in the recent FTC Ethyl case. The possibility of offering discounts selectively results in a much more competitive situation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 18 (1987)
Issue (Month): 2 (Summer)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Robert H. Porter & J. Douglas Zona, 1997.
"Ohio School Milk Markets: An Analysis of Bidding,"
NBER Working Papers
6037, National Bureau of Economic Research, Inc.
- C. Monica Capra & Jacob K Goeree & Rosario Gomez & Charles A Holt, 2002.
"Learning and Noisy Equilibrium Behavior in an Experimental Study of Imperfect Price Competition,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 613-636, August.
- C. Monica Capra & Jacob K. Goeree & Rosario Gomez & Charles A. Holt, 2000. "Learning and Noisy Equilibrium Behavior in an Experimental Study of Imperfect Price Competition," Virginia Economics Online Papers 336, University of Virginia, Department of Economics.
- Patrick Hughes & Margaret Sanderson, 1998. "Conspiracy Law and Jurisprudence in Canada: Towards an Economic Approach," Review of Industrial Organization, Springer, vol. 13(1), pages 153-176, April.
- Massimo Motta & Michele Polo, . "Product differentiation and endogenous mode of competition," Working Papers 134, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Marshall, Robert C. & Marx, Leslie M. & Raiff, Matthew E., 2008. "Cartel price announcements: The vitamins industry," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 762-802, May.
- Fiona Scott Morton, 1996. "The Strategic Response by Pharmaceutical Firms to the Medicaid Most-Favored-Customer Rules," NBER Working Papers 5717, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.