Advanced Search
MyIDEAS: Login

Price Control In Franchised Chains: The Case Of McDonald's Dollar Menu

Contents:

Author Info

  • Itai Ater

    ()
    (Tel Aviv University)

  • Oren Rigbi

    ()
    (Ben-Gurion University of the Negev)

Registered author(s):

    Abstract

    We analyze price patterns at franchised and corporate-owned McDonald's outlets in 1999 and 2006 and find that prices at franchised outlets were higher than those at corporate outlets. The price difference between franchised and corporate outlets decreased between 1999 and 2006 but only for items with close substitutes in the Dollar Menu, which was introduced in 2002. We also find that the price difference between franchised and corporate outlets was higher among outlets located near highways than among non-highway locations. After the Dollar Menu was introduced, this highway - non-highway difference diminished. Our findings suggest that the Dollar Menu improved McDonald's corporation's control over franchisees' prices.

    Download Info

    If 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.
    File URL: http://www.ec.bgu.ac.il/monaster/admin/papers/1206.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number 1206.

    as in new window
    Length: 35 pages
    Date of creation: 2012
    Date of revision:
    Handle: RePEc:bgu:wpaper:1206

    Contact details of provider:
    Postal: P.O.B 653, Beer-Sheva 84105
    Phone: +972-8-647-2268
    Fax: +972-8-647-2941
    Web page: http://www.ec.bgu.ac.il/
    More information through EDIRC

    Related research

    Keywords: Franchising; Free-Riding; Reputation; Advertising; Vertical Restraints;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. G.F. Mathewson & R.A. Winter, 1984. "An Economic Theory of Vertical Restraints," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 27-38, Spring.
    2. Toivanen, O. & Waterson, M., 2001. "Market Structure and Entry: Where's the Beef?," The Warwick Economics Research Paper Series (TWERPS) 593, University of Warwick, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:bgu:wpaper:1206. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aamer Abu-Qarn).

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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