EconPapers    
Economics at your fingertips  
 

Bilateral Most-Favored-Customer Pricing and Collusion

William Neilson () and Harold Winter

RAND Journal of Economics, 1993, vol. 24, issue 1, 147-155

Abstract: In a two-period differentiated products duopoly model, most-favored-customer (MFC) pricing policies allow firms to commit to prices above the Bertrand prices. It is shown here, however, that unless a restrictive and unappealing assumption is made about demand, there is no equilibrium in which both firms adopt MFC policies. The restrictive assumption is that at least one firm's demand is more responsive to changes in its opponent's price than to changes in its own price; otherwise, firms have an incentive to deviate from a greater-than-Bertrand price in the first period.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819932 ... O%3B2-A&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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: https://EconPapers.repec.org/RePEc:rje:randje:v:24:y:1993:i:spring:p:147-155

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().

 
Page updated 2021-03-28
Handle: RePEc:rje:randje:v:24:y:1993:i:spring:p:147-155