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Price-Matching Policy and the Principle of Minimum Differentiation

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  • Zhang, Z John

Abstract

This paper shows that if duopolists are allowed to choose their product locations, a price-matching policy, and their prices sequentially and independently, both tacit collusion and minimum differentiation occur. Copyright 1995 by Blackwell Publishing Ltd.

Suggested Citation

  • Zhang, Z John, 1995. "Price-Matching Policy and the Principle of Minimum Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 43(3), pages 287-299, September.
  • Handle: RePEc:bla:jindec:v:43:y:1995:i:3:p:287-99
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    Citations

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    Cited by:

    1. Ching-Chih Tseng & Wen-Jung Liang & Kuang-Cheng Andy Wang, 2010. "Spatial agglomeration with vertical differentiation," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 841-858, November.
    2. repec:eee:joreco:v:34:y:2017:i:c:p:102-116 is not listed on IDEAS
    3. Wen-Jung Liang & Kuang-Cheng Wang & Hong-Ren Din, 2014. "Spatial Competition and Flexible Manufacturing with Spatially Discriminatory Pricing," ERSA conference papers ersa14p234, European Regional Science Association.
    4. Yuxin Chen & Chakravarthi Narasimhan & Z. John Zhang, 2001. "Consumer Heterogeneity and Competitive Price-Matching Guarantees," Marketing Science, INFORMS, vol. 20(3), pages 300-314, June.
    5. Arcan Nalca & Tamer Boyaci & Saibal Ray, 2010. "Competitive price-matching guarantees under imperfect store availability," Quantitative Marketing and Economics (QME), Springer, vol. 8(3), pages 275-300, September.
    6. Anne T. Coughlan & Greg Shaffer, 2009. "—Price-Matching Guarantees, Retail Competition, and Product-Line Assortment," Marketing Science, INFORMS, vol. 28(3), pages 580-588, 05-06.
    7. repec:kap:qmktec:v:15:y:2017:i:2:d:10.1007_s11129-017-9182-0 is not listed on IDEAS
    8. Chia-Hung Sun & Fu-Chuan Lai, 2013. "Hotelling was right with decreasing returns to scale and a coalition-proof refinement," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 953-971, June.
    9. repec:eee:jouret:v:87:y:2011:i:2:p:182-193 is not listed on IDEAS
    10. Mai, Chao-cheng & Peng, Shin-kun, 1999. "Cooperation vs. competition in a spatial model," Regional Science and Urban Economics, Elsevier, vol. 29(4), pages 463-472, July.
    11. Granero, Lluís M., 2013. "Most-favored-customer pricing, product variety, and welfare," Economics Letters, Elsevier, vol. 120(3), pages 579-582.
    12. Aguirre, Inaki & Paz Espinosa, Maria, 2004. "Product differentiation with consumer arbitrage," International Journal of Industrial Organization, Elsevier, vol. 22(2), pages 219-239, February.
    13. Liang, Wen-Jung & Mai, Chao-Cheng, 2006. "Validity of the principle of minimum differentiation under vertical subcontracting," Regional Science and Urban Economics, Elsevier, vol. 36(3), pages 373-384, May.
    14. Wen-Jung Liang & Yen-Ju Lin & Hong Hwang, 2012. "Heterogeneous duopoly, spatially discriminatory pricing, and optimal location," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 845-860, December.
    15. 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.
    16. Szentes, Balázs, 2015. "Contractible contracts in common agency problems," LSE Research Online Documents on Economics 66071, London School of Economics and Political Science, LSE Library.
    17. Dong, Gang & Huang, Rongbing & Ng, Peggy, 2016. "Tacit collusion between two terminals of a port," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 199-211.
    18. Bhadury, J. & Eiselt, H. A., 1999. "Brand positioning under lexicographic choice rules," European Journal of Operational Research, Elsevier, vol. 113(1), pages 1-16, February.
    19. Morten Hviid & Greg Shaffer, 2010. "MATCHING OWN PRICES, RIVALS' PRICES OR BOTH? -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 479-506, September.
    20. Eyal Biyalogorsky & Eitan Gerstner, 2004. "Contingent Pricing to Reduce Price Risks," Marketing Science, INFORMS, vol. 23(1), pages 146-155, March.
    21. Morten Hviid & Greg Shaffer, 2012. "Optimal low-price guarantees with anchoring," Quantitative Marketing and Economics (QME), Springer, vol. 10(4), pages 393-417, December.

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