On the incidence and variety of low-price guarantees

Arbatskaya, Maria, Hviid, Morten and Shaffer, Greg (2004) On the incidence and variety of low-price guarantees. Journal of Law & Economics, 47 (1). pp. 307-332. ISSN 0022-2186

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Abstract

This paper provides evidence of the incidence and variety of low‐price guarantees (promises to match or beat a rival’s price) using data obtained from newspaper advertisements in 37 metropolitan areas in the United States. We have a total of 515 low‐price guarantees in our sample. We document their features, and we infer firms' motives and effects from these features. The evidence suggests that the majority of low‐price guarantees are not consistent with their use as a facilitating device because they tend to apply only to rival firms’ advertised prices or they are associated with high hassle costs. The evidence also suggests that price‐beating and price‐matching guarantees differ significantly in their features. The former are associated with higher hassle costs, apply disproportionately to rival firms’ advertised prices, and are more likely to allow postsale search than are price‐matching guarantees.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > Norwich Business School Faculty of Social Sciences > School of Economics
UEA Research Groups:	Faculty of Medicine and Health Sciences > Research Centres > Business and Local Government Data Research Centre (former - to 2023) Faculty of Social Sciences > Research Groups > Competition, Markets and Regulation Faculty of Social Sciences > Research Groups > Media, Information Technology and Intellectual Property Law Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Depositing User:	Julie Frith
Date Deposited:	16 Nov 2010 09:41
Last Modified:	24 Sep 2024 10:02
URI:	https://ueaeprints.uea.ac.uk/id/eprint/10814
DOI:	10.1086/386275

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