On the incidence and Variety of Low-Price Guarantees

Maria Arbatskaya (), Morten Hviid and Greg Shaffer
Additional contact information
Greg Shaffer: University of Rochester

No 1999-10, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: We provide evidence of the widespread use and variety of low-price guarantees (how common are they; on what products and services are they observed; and what forms do they take), using data obtained from newspaper advertisements in thirty-seven metropolitan areas in the United States. We also consider why firms adopt LPGs. Is it to facilitate tacit collusion, to price discriminate, or do firms have other motivations? Do price-beating guarantees serve the same purpose as price-matching guarantees? We infer the answers to these questions from (a) the extent to which firms place restrictions on their LPGs; (b) whether LPGs apply to advertised prices or actual selling prices, and (c) whether firms with LPGs have higher or lower prices than firms without LPGs. We also uncover aspects of LPGs that have not previously been studied, e.g., 43% of LPGs allow post-sale search. Our findings suggest topics for future research.

Keywords: facilitating practices; low-price guarantees; collusion (search for similar items in EconPapers)
JEL-codes: L13 L41 (search for similar items in EconPapers)
Date: 1999-05
References: Add references at CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.econ.ku.dk/cie/dp/dp_1997-1999/1999-10.pdf/ (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: On the Incidence and Variety of Low-Price Guarantees (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:kud:kuieci:1999-10

Access Statistics for this paper

More papers in CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics
Address: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark
Contact information at EDIRC.
Series data maintained by Sabine Fischer ().