A Note on the Most‐Favoured‐Customer Pricing Policy

Kazuhiro Ohnishi

Bulletin of Economic Research, 2003, vol. 55, issue 4, 407-413

Abstract: This paper extends the retroactive most‐favoured‐customer pricing policy examined by Cooper (1986). He showed that the policy enabled both firms in a duopoly to offer higher prices and to enjoy higher profits. This paper introduces a variable into the most‐favoured‐customer pricing policy. Then, it shows that there is an equilibrium in which the duopolists can further increase their profits.

Date: 2003
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