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On the strategic choice of spatial price policy: the role of the pricing game rules

Author

Listed:
  • Iñaki Aguirre

    () (Universidad del Pais Vasco)

  • Ana M. Martin

    () (Universidad del Pais Vasco)

Abstract

The strategic choice of spatial price policy under duopoly crucially depends on the rules of price competition. We show that under simultaneous price competition and under leader-follower price competition (with the discriminatory firm being the leader), the pricing policy game is not, as stated by Thisse and Vives (1988), a Prisoner's Dilemma.

Suggested Citation

  • Iñaki Aguirre & Ana M. Martin, 2001. "On the strategic choice of spatial price policy: the role of the pricing game rules," Economics Bulletin, AccessEcon, vol. 12(2), pages 1-7.
  • Handle: RePEc:ebl:ecbull:eb-01l10002
    as

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    References listed on IDEAS

    as
    1. Lederer, Phillip J & Hurter, Arthur P, Jr, 1986. "Competition of Firms: Discriminatory Pricing and Location," Econometrica, Econometric Society, vol. 54(3), pages 623-640, May.
    2. Thisse, Jacques-Francois & Vives, Xavier, 1988. "On the Strategic Choice of Spatial Price Policy," American Economic Review, American Economic Association, vol. 78(1), pages 122-137, March.
    3. Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 1-26.
    4. Eber, Nicolas, 1997. "A note on the strategic choice of spatial price discrimination," Economics Letters, Elsevier, vol. 55(3), pages 419-423, September.
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    Cited by:

    1. Aguirre, Inaki & Paz Espinosa, Maria, 2004. "Product differentiation with consumer arbitrage," International Journal of Industrial Organization, Elsevier, vol. 22(2), pages 219-239, February.
    2. Torbenko, A., 2015. "Linear City Models: Overview and Typology," Journal of the New Economic Association, New Economic Association, vol. 25(1), pages 12-38.

    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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