Theory and evidence on pricing by asymmetric oligopolies

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Koçaş, Cenk and Kıyak, Tunga (2006) Theory and evidence on pricing by asymmetric oligopolies. International Journal of Industrial Organization, 24 (1). pp. 83-105. ISSN 0167-7187

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Official URL: http://dx.doi.org/10.1016/j.ijindorg.2005.02.003


We present an analysis of markets with many asymmetrically positioned retailers that compete for the business of both informed and uninformed customers for a homogenous good, such as software, music, book or a brand-name appliance. We show that two forms of asymmetry, one related to loyal segment sizes of retailers and one related to the positioning of firms, completely explain the observed price dispersion in such markets and the multitude of asymmetrical strategies adopted by retailers. The stochastic dominance of empirical mixed strategy measures is used to test the theory with data on 968 books from 10 online retailers.

Item Type:Article
Uncontrolled Keywords:Price comparison shopping; price competition; oligopoly; internet economics.
Subjects:H Social Sciences > HF Commerce
ID Code:242
Deposited By:Cenk Koçaş
Deposited On:21 Feb 2007 02:00
Last Modified:17 Sep 2019 14:21

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