CHAIN-STORE PRICING FOR STRATEGIC ACCOMMODATION

Paul Dobson and Michael Waterson

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served - price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with entry being inevitable in certain markets while being naturally or institutionally blockaded in others. We show that practising price discrimination is not always best for the chain-store. Competitive conditions exist under which uniform pricing can raise profits.

Keywords: Chain-store; Pricing Policy; Price Discrimination; Local Markets (search for similar items in EconPapers)
JEL-codes: L10 L11 L40 L66 L81 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2003
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https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp677.pdf

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Working Paper: Chain-Store Pricing for Strategic Accommodation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:677

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