Price Discrimination Through Offers to Match Price

Posted: 1 Dec 2008

See all articles by David A. Hirshleifer

David A. Hirshleifer

University of California, Irvine - Paul Merage School of Business; NBER

Date Written: July 1, 1987

Abstract

In this paper, a firm discriminates between two classes of customer who have a different cost of information by coupling a list price with an offer to match the pr ice of any other shop. If the list price elsewhere is lower, the firm will be successful in discrimination. The list price of each firm is increasing in the number of sellers and the total sales are decreasing in the number of sellers. Furthermore, if sellers coordinate, they discriminate more efficaciously and increase their profits by increasing their total sales.

Suggested Citation

Hirshleifer, David A., Price Discrimination Through Offers to Match Price (July 1, 1987). Journal of Business, Vol. 60, No. 3, pp. 365-383, July 1987. Available at SSRN: https://ssrn.com/abstract=1279595

David A. Hirshleifer (Contact Author)

University of California, Irvine - Paul Merage School of Business ( email )

Irvine, CA California 92697-3125
United States

HOME PAGE: http://sites.uci.edu/dhirshle/

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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