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- Title
PRICE DIFFERENCES IN ALMOST COMPETITIVE MARKETS.
- Authors
Pratt, John W.; Wise, David A.; Zeckhauser, Richard
- Abstract
This article discusses the price differences in almost competitive markets. To gather the evidence on diversity among prices, the thirty-nine standardized products were selected according to a random procedure. Many factors may have contributed to these notable differences in quoted price. Sellers are assumed to be expected value maximizers. In setting their prices, they weigh higher profits per sale against the prospect of fewer sales. Buyers employ searching and buying strategies: In deciding whether to seek further price quotations, they balance the prospect of securing a lower price against greater incurred search costs. The confluence of these two sets of decisions is a market outcome.
- Subjects
PRICING; PRICE quotations; BREAK-even analysis; PROFIT; COST effectiveness; PRODUCT quality
- Publication
Quarterly Journal of Economics, 1979, Vol 93, Issue 2, p189
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1883191