Topic: Asymmetric Pricing Policies in Chain Store Competition
Speaker: Liang Guo, Hong Kong University of Science and Technology.
Time: 3:15-4:30pm, June 9, 2010
Location: Room217, New Building of GSM, Peking University.
Abstract
Retail chains that operate multiple stores need to decide whether to customize their prices to each local market or to forsake price discrimination in favor of uniform pricing. Practice provides mixed support for either pricing policy. Some retail chains may choose customized pricing, whereas their rivals in the same sector may adopt uniform pricing. In this paper we show that asymmetric pricing policies can soften price competition in all markets for symmetric retail chains even in the absence of market expansion. Therefore, a "win-win" situation would arise if competing retail chains endogenously choose asymmetric pricing policies. This suggests that pricing policy can constitute a strategic instrument for differentiation.
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