Pro-competitive price beating guarantees

Fatas, Enrique, Georgantzis, Nikolaos, Máñez, Juan A. and Sabater-Grande, Gerardo (2005) Pro-competitive price beating guarantees. Review of Industrial Organisation, 26 (1). pp. 115-137. ISSN 0889-938X

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We report experimental results on duopoly pricing with and without price beating guarantees (PBG). In two control treatments, price beating is either imposed as an industry-wide rule or offered as a business strategy. Our major finding is that when price beating guarantees are imposed as a rule or offered as an option, effective prices are equal to or lower than those in a baseline treatment in which price beating is forbidden. Also, when price beating is treated as a business strategy, less than 50% of subjects adopted the guarantee, suggesting that, subjects realize the pro-competitive effects of the guarantee.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Julie Frith
Date Deposited: 16 Jan 2013 15:47
Last Modified: 24 Oct 2022 02:18
DOI: 10.1007/s11151-004-6614-2

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