Pricing and matching under duopoly with imperfect buyer mobility
AbstractRecent contributions have explored how lack of buyer mobility affects pricing. For example, Burdett, Shi, and Wright (2001) envisage a two-stage game where, once prices are set by the firms, the buyers play a static game by choosing independently which firm to visit. We incorporate imperfect mobility in a duopolistic pricing game where the buyers are involved into a multi-stage game. The firms are shown to have an incentive to give service priority to loyal customers. Under this rationing rule, equilibrium prices converge to their value under perfect buyer mobility as the number of stages of the buyer game increases
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Bibliographic InfoPaper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 439.
Date of creation: Nov 2004
Date of revision:
Bertrand competition; matching; imperfect mobility; sequential equilibrium; buyerloyalty;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-27 (All new papers)
- NEP-COM-2005-06-27 (Industrial Competition)
- NEP-IND-2005-06-27 (Industrial Organization)
- NEP-MIC-2005-06-27 (Microeconomics)
- NEP-MKT-2005-06-27 (Marketing)
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