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- Title
On The Strategic Choice of Spatial Price Policy.
- Authors
Thisse, Jacques-Francois; Vives, Xavier
- Abstract
Price discrimination emerges as the unique equilibrium outcome in games with either simultaneous choice of policy and price or sequential choice in which firms may commit first to uniform mill pricing before the actual market stage. Our results are used to analyze some common business practices that arise in geographical pricing like the basing point system, and in the pricing of varieties or options from a base product in a product differentiation context.
- Subjects
PRICING; BUSINESS enterprises; RESTRAINT of trade; PRICE discrimination; PRODUCT differentiation; MARKETING; TRADE regulation
- Publication
American Economic Review, 1988, Vol 78, Issue 1, p122
- ISSN
0002-8282
- Publication type
Article