On the incidence and Variety of Low-Price Guarantees
AbstractWe provide evidence of the widespread use and variety of low-price guarantees (how common are they; on what products and services are they observed; and what forms do they take), using data obtained from newspaper advertisements in thirty-seven metropolitan areas in the United States. We also consider why firms adopt LPGs. Is it to facilitate tacit collusion, to price discriminate, or do firms have other motivations? Do price-beating guarantees serve the same purpose as price-matching guarantees? We infer the answers to these questions from (a) the extent to which firms place restrictions on their LPGs; (b) whether LPGs apply to advertised prices or actual selling prices, and (c) whether firms with LPGs have higher or lower prices than firms without LPGs. We also uncover aspects of LPGs that have not previously been studied, e.g., 43% of LPGs allow post-sale search. Our findings suggest topics for future research.
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.
Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 1999-10.
Length: 38 pages
Date of creation: May 1999
Date of revision:
Contact details of provider:
Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark
Phone: (0045) 35 32 30 54
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/cie/
More information through EDIRC
facilitating practices; low-price guarantees; collusion;
Other versions of this item:
- Arbatskaya, Maria & Hviid, Morten & Shaffer, Greg, 2004. "On the Incidence and Variety of Low-Price Guarantees," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 307-32, April.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- 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.
- Dutta, Sujay & Bhowmick, Sandeep, 2009. "Consumer responses to offline and online low price signals: The role of cognitive elaboration," Journal of Business Research, Elsevier, vol. 62(6), pages 629-635, June.
- Xu, Frances Zhiyun, 2011. "Optimal best-price policy," International Journal of Industrial Organization, Elsevier, vol. 29(5), pages 628-643, September.
- Subhasish Dugar, 2007. "Price-Matching Guarantees and Equilibrium Selection in a Homogenous Product Market: An Experimental Study," Review of Industrial Organization, Springer, vol. 30(2), pages 107-119, March.
- Subhasish Dugar & Todd Sorensen, 2006. "Hassle Costs, Price-Matching Guarantees and Price Competition: An Experiment," Review of Industrial Organization, Springer, vol. 28(4), pages 359-378, June.
- Wen Mao, 2005. "Price-matching policy with imperfect information," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(6), pages 367-372.
- Desmet, Pierre & Le Nagard, Emmanuelle & Vinzi, Vincenzo Esposito, 2012. "Refund depth effects on the impact of price-beating guarantees," Journal of Business Research, Elsevier, vol. 65(5), pages 603-608.
- Antonio Cabrales & Sergi Jiménez‐Martín, 2013.
"The Determinants Of Pricing In Pharmaceuticals: Are Us Prices Really So High?,"
John Wiley & Sons, Ltd., vol. 22(11), pages 1377-1397, November.
- Antonio Cabrales & Sergi Jiménez-Martín, 2008. "The Determinants of Pricing in Pharmaceuticals: Are U.S. prices really so high?," Working Papers 2008-18, FEDEA.
- 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.
- 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.
- Antonio Cabrales & Sergi Jiménez-Martín, 2007.
"The determinants of pricing in pharmaceuticals: Are U.S. prices really higher than those of Canada?,"
Economics Working Papers
1032, Department of Economics and Business, Universitat Pompeu Fabra.
- Antonio Cabrales & Sergi Jiménez-Martín, 2007. "The Determinants of Pricing in Pharmaceuticals: Are U.S. prices really higher than those of Canada?," Working Papers 304, Barcelona Graduate School of Economics.
- Sergi Jimenez-Martin & Antonio Cabrales, 2007. "The determinants of pricing in pharmaceuticals : are U.S. prices really higher than those of Canada?," Economics Working Papers we074021, Universidad Carlos III, Departamento de Economía.
- Antonio Cabrales & Sergi Jiménez-Martín, 2007. "The Determinants of Pricing in Pharmaceuticals: Are U.S. Prices Really Higher than Those of Canada?," UFAE and IAE Working Papers 697.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Norovsambuu Tumennasan, 2011.
"Quantity Precommitment and Price Matching,"
Economics Working Papers
2011-13, School of Economics and Management, University of Aarhus.
- 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.
- Janssen, Maarten C.W. & Parakhonyak, Alexei, 2013.
"Price matching guarantees and consumer search,"
International Journal of Industrial Organization,
Elsevier, vol. 31(1), pages 1-11.
- Morten Hviid & Greg Shaffer, 2012. "Optimal low-price guarantees with anchoring," Quantitative Marketing and Economics, Springer, vol. 10(4), pages 393-417, December.
- Koh, Dong-Hee & Moon, Junyean & Schellhase, Ralf, 2012. "Price-matching guarantees: Influences on pricing strategy in a market with asymmetric firms," Journal of Business Research, Elsevier, vol. 65(11), pages 1551-1557.
- Arcan Nalca & Tamer Boyaci & Saibal Ray, 2010. "Competitive price-matching guarantees under imperfect store availability," Quantitative Marketing and Economics, Springer, vol. 8(3), pages 275-300, September.
- Arbatskaya, Maria & Hviid, Morten & Shaffer, Greg, 2006. "On the use of low-price guarantees to discourage price cutting," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1139-1156, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann).
If references are entirely missing, you can add them using this form.