IDEAS home Printed from https://ideas.repec.org/a/rje/randje/v25y1994iwinterp608-618.html
   My bibliography  Save this article

Asymmetric Price Competition with Price Inertia

Author

Listed:
  • Arthur Fishman

Abstract

In this article, I analyze price competition under price inertia. After setting prices, sellers are unable to change them for a period of predetermined length, but may delay price commitments indefinitely. Although most consumers consider the firms' products to be perfect substitutes, an arbitrarily small number of "captive" consumers display brand loyalty to a particular firm, even when the competing brand is cheaper. In this article, I show that a firm with even slightly fewer captive consumers than its competitor achieves monopoly power over all remaining consumers.

Suggested Citation

  • Arthur Fishman, 1994. "Asymmetric Price Competition with Price Inertia," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 608-618, Winter.
    • Handle: RePEc:rje:randje:v:25:y:1994:i:winter:p:608-618
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0741-6261%28199424%2925%3A4%3C608%3AAPCWPI%3E2.0.CO%3B2-5&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roy, Santanu, 2000. "Strategic segmentation of a market," International Journal of Industrial Organization, Elsevier, vol. 18(8), pages 1279-1290, December.
    2. Pastine, Tuvana & Pastine, Ivan, 2001. "Cost of Delay, Deadlines and Endogenous Price Leadership," CEPR Discussion Papers 3054, C.E.P.R. Discussion Papers.
    3. Sneha Bakshi, 2020. "Limits of price competition: cost asymmetry and imperfect information," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(4), pages 913-932, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:25:y:1994:i:winter:p:608-618. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rje.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.