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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. 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.
    2. Eber, Nicolas, 1997. "A note on the strategic choice of spatial price discrimination," Economics Letters, Elsevier, vol. 55(3), pages 419-423, September.
    3. 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.
    4. Edward C. Prescott & Michael Visscher, 1977. "Sequential Location among Firms with Foresight," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 378-393, Autumn.
    5. Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(1), pages 1-26.
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    Cited by:

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    3. Jen-Te Yao, 2019. "The impact of transportation asymmetry on the choice of a spatial price policy," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 793-811, October.

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    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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