Unbeatable Value Low-Price Guarantee: Collusive Mechanism or Advertising Strategy?
"This paper investigates the effects of a low-price guarantee (price-beating guarantee) on the patterns of price setting of three supermarkets using micro-level price data. Following recent theoretical developments, the paper analyzes the ability of low-price guarantees to sustain anticompetitive prices. My empirical analysis suggests instead that this low-price guarantee may serve as an advertising device to signal low prices. The supermarket offering the low-price guarantee, aware of its price advantage in a subset of products, uses it to signal low prices to induce consumers to switch supermarkets." Copyright 2006, The Author(s) Journal Compilation (c) 2006 Blackwell Publishing.
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Volume (Year): 15 (2006)
Issue (Month): 1 (03)
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