Theory and evidence on pricing by asymmetric oligopolies
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 si...
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Published in | International journal of industrial organization Vol. 24; no. 1; pp. 83 - 105 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Elsevier B.V
2006
Elsevier |
Series | International Journal of Industrial Organization |
Subjects | |
Online Access | Get full text |
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Summary: | 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. |
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Bibliography: | ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 |
ISSN: | 0167-7187 |
DOI: | 10.1016/j.ijindorg.2005.02.003 |