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Price-matching policy with imperfect information

  • Wen Mao

    (Department of Economics, Villanova University, Villanova, PA 19085, USA)

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The model of price-matching policy emphasizes on the importance of information imperfection. The demand is derived based on the assumptions that consumers have different reservation prices and different preferences over location. When a firm undercuts its competitor's price, it changes the demand structure of the market. The result shows that price-matching policies are anticompetitive, but they do not facilitate monopoly price. Copyright © 2005 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1233
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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 26 (2005)
Issue (Month): 6 ()
Pages: 367-372

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Handle: RePEc:wly:mgtdec:v:26:y:2005:i:6:p:367-372
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  1. Maria Arbatskaya & Morten Hviid & Greg Shaffer, 1999. "On the incidence and Variety of Low-Price Guarantees," CIE Discussion Papers 1999-10, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  2. Morten Hviid & Greg Shaffer, 1999. "Hassle Costs: The Achilles' Heel of Price-Matching Guarantees," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(4), pages 489-521, December.
  3. Corts, Kenneth S., 1997. "On the competitive effects of price-matching policies," International Journal of Industrial Organization, Elsevier, vol. 15(3), pages 283-299, May.
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