Uniform Pricing Versus Mill Pricing
Author: Wrede, Matthias
Source: Journal of Regional Science, Volume 43, Number 1, February 2003 , pp. 167-179(13)
Abstract:This paper analyzes the coexistence of different pricing strategies. The purpose is to discuss how firms that are limited to uniform pricing affect the outcome of price competition among mill–price–setting firms. Price competition among (three) firms that are restricted to mill pricing is analyzed within the classic Hotelling framework and uniform–price–setting firms are considered as first movers. If uniform–price–setting firms deliver any good, they effectively separate mill–price–setting firms from each other. Finally, it is shown that price competition among first movers strengthens the effects of cross–type price competition.
Document Type: Research Article
Affiliations: Aachen University, Germany email@example.com–aachen.de
Publication date: 2003-02-01