Logo
Munich Personal RePEc Archive

Price Competition under Limited Comparability

Piccione, Michele and Spiegler, Ran (2009): Price Competition under Limited Comparability.

[thumbnail of MPRA_paper_21427.pdf]
Preview
PDF
MPRA_paper_21427.pdf

Download (254kB) | Preview

Abstract

This paper studies market competition when firms can influence consumers' ability to compare market alternatives, through their choice of price "formats". We introduce random graphs as a tool for modelling limited comparability of formats. Our main results concern the interaction between firms' equilibrium price and format decisions and its implications for industry profits and consumer switching rates. We show that narrow regulatory interventions that aim to facilitate comparisons may have adverse consequences for consumer welfare. Finally, we argue that our limited-comparability approach provides a new perspective into the phenomenon of product differentiation.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.