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Pricing and price competition in consumer markets
Stockholm University, Faculty of Social Sciences, The Swedish Institute for Social Research (SOFI).
2017 (English)In: Journal of Economics, ISSN 0931-8658, E-ISSN 1617-7134, Vol. 120, no 2, 119-133 p.Article in journal (Refereed) Published
Abstract [en]

This paper offers a simple model of the price mechanism in markets where buyers take prices as given and prices are set by sellers, as in most consumer markets. It explains price competition by arguing that a market price goes down if-and only if-a price cut appears profitable to a firm even if its competitors follow suit. It also explains why markets do not always clear, that is, why production can be restricted by sales and not capacity at prices set by firms.

Place, publisher, year, edition, pages
2017. Vol. 120, no 2, 119-133 p.
Keyword [en]
Oligopoly, Pricing, Price competition, Price leadership
National Category
Economics
Identifiers
URN: urn:nbn:se:su:diva-139803DOI: 10.1007/s00712-016-0503-7ISI: 000394378700002OAI: oai:DiVA.org:su-139803DiVA: diva2:1074133
Available from: 2017-02-14 Created: 2017-02-14 Last updated: 2017-04-03Bibliographically approved

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CiteExportLink to record
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