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RESEARCH PRODUCT
Unbeatable Value Low-Price Guarantee: Collusive Mechanism or Advertising Strategy?
Juan A. Mañezsubject
TheoryofComputation_MISCELLANEOUSMicroeconomicsEconomics and EconometricsManagement of Technology and InnovationStrategy and ManagementValue (economics)EconomicsTheoryofComputation_GENERALPrice settingAdvertisingPrice matchingGeneral Business Management and Accountingdescription
This paper investigates the effects of a low-price guarantee (price-beating guarantee) on the patterns of price setting of three supermarkets using micro-level price data. Following recent theoretical developments, the paper analyzes the ability of low-price guarantees to sustain anticompetitive prices. My empirical analysis suggests instead that this low-price guarantee may serve as an advertising device to signal low prices. The supermarket offering the low-price guarantee, aware of its price advantage in a subset of products, uses it to signal low prices to induce consumers to switch supermarkets.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2006-03-01 | Journal of Economics <html_ent glyph="@amp;" ascii="&amp;"/> Management Strategy |