Price-matching policy with imperfect information

Wen Mao
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Wen Mao: Department of Economics, Villanova University, Villanova, PA 19085, USA, Postal: Department of Economics, Villanova University, Villanova, PA 19085, USA

Managerial and Decision Economics, 2005, vol. 26, issue 6, pages 367-372

Abstract: 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.

Date: 2005
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