Advanced Search
MyIDEAS: Login

Matching Own Prices, Rivals' Prices, or Both

Contents:

Author Info

  • Morten Hviid

    ()
    (ESRC Centre for Competition Policy and Norwich Law School, University of East Anglia)

  • Greg Shaffer

    ()
    (ESRC Centre for Competition Policy, University of East Anglia, and Simon School of Business, University of Rochester)

Abstract

Many retailers promise that they will not be undersold by rivals (price-matching guarantees) and extend their promise to include their own future prices (most-favored-customer clauses). This is puzzling because the extant literature has shown that each promise independently has the potential to facilitate supracompetitive prices, and so one might think that the two promises are substitutes. In this paper, we consider why a firm might make both promises in the same guarantee, and show that price-matching guarantees and most-favored-customer clauses complement each other and can lead to higher prices than either one could have facilitated by itself.

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.ccp.uea.ac.uk/publicfiles/workingpapers/CCP08-26.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 08-26.

as in new window
Length: 31 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:ccp:wpaper:wp08-26

Contact details of provider:
Postal: Norwich, NR4 7TJ
Phone: +44(0)1603 593715
Fax: +44(0)1603 591622
Email:
Web page: http://www.ccp.uea.ac.uk
More information through EDIRC

Related research

Keywords: facilitating practices; low-price guarantees; antitrust policy;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

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

Cited by:
  1. Schwalbe, Ulrich & Baake, Pio, 2013. "Price Guarantees, Consumer Search, and Hassle Costs," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80023, Verein für Socialpolitik / German Economic Association.
  2. Pio Baake & Ulrich Schwalbe, 2013. "Price Guarantees, Consumer Search, and Hassle Costs," Discussion Papers of DIW Berlin 1335, DIW Berlin, German Institute for Economic Research.

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:ccp:wpaper:wp08-26. 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: (Cheryl Whittkaer) The email address of this maintainer does not seem to be valid anymore. Please ask Cheryl Whittkaer to update the entry or send us the correct address.

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.