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"Will That Be Pickup or Delivery?": An Alternative Spatial Pricing Strategy

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  • William J. Furlong
  • George A. Slotsve

Abstract

This article demonstrates that when consumers are offered a choice between pickup and delivery, a firm can increase profits relative to the case when no choice is tendered, as in the mill or uniform spatial pricing models. Further, this choice yields a lower level of welfare than that obtained under mill pricing. These results hold in models where market size is endogenous as well as exogenous to the firm's decisions, and with tastes and technology that are fairly standard in the spatial literature.

Suggested Citation

  • William J. Furlong & George A. Slotsve, 1983. ""Will That Be Pickup or Delivery?": An Alternative Spatial Pricing Strategy," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 271-274, Spring.
  • Handle: RePEc:rje:bellje:v:14:y:1983:i:spring:p:271-274
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    Cited by:

    1. H. J. Plunkett & W. E. Morgan & J. L. Pomeroy, 1997. "Regulation of The Indonesian Cement Industry," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 33(1), pages 75-102.
    2. Ngeleza Guyslain K. & Robinson Elizabeth J.Z., 2013. "Cartels and Rent Sharing at the Farmer–Trader Interface: Evidence from Ghana’s Tomato Sector," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 1-16, January.
    3. Benjamin Musah Abu & Haruna Issahaku & Paul Kwame Nkegbe, 2016. "Farmgate versus market centre sales: a multi-crop approach," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-16, December.

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