File Download

There are no files associated with this item.

  Links for fulltext
     (May Require Subscription)
Supplementary

Article: Optimal best-price policy

TitleOptimal best-price policy
Authors
KeywordsBest-price policy
Coase Conjecture
Intertemporal price discrimination
Issue Date2011
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/ijio
Citation
International Journal Of Industrial Organization, 2011, v. 29 n. 5, p. 628-643 How to Cite?
AbstractA best-price policy (BP) is a promise by a seller to give her customer a refund if she reduces her price after the customer has already purchased the product. We characterize the optimal BP policy as when the seller can control both the policy length (when the promise expires) and the refund scale (what portion of the price difference is refunded). We explain why the policy length is finite and varies across industries. In a setting where consumers' valuations decline over time, we show that a finite-length BP allows the seller to commit to not lowering her price too soon, while at the same time letting her capture some of the benefits of intertemporal price discrimination. However, because the decline in consumers' valuations is uncertain, a BP does not allow the monopolist to achieve the profit she could earn with a full commitment. © 2011 Elsevier B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/160024
ISSN
2015 Impact Factor: 0.866
2015 SCImago Journal Rankings: 1.085
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorXu, FZen_HK
dc.date.accessioned2012-08-16T06:00:43Z-
dc.date.available2012-08-16T06:00:43Z-
dc.date.issued2011en_HK
dc.identifier.citationInternational Journal Of Industrial Organization, 2011, v. 29 n. 5, p. 628-643en_HK
dc.identifier.issn0167-7187en_HK
dc.identifier.urihttp://hdl.handle.net/10722/160024-
dc.description.abstractA best-price policy (BP) is a promise by a seller to give her customer a refund if she reduces her price after the customer has already purchased the product. We characterize the optimal BP policy as when the seller can control both the policy length (when the promise expires) and the refund scale (what portion of the price difference is refunded). We explain why the policy length is finite and varies across industries. In a setting where consumers' valuations decline over time, we show that a finite-length BP allows the seller to commit to not lowering her price too soon, while at the same time letting her capture some of the benefits of intertemporal price discrimination. However, because the decline in consumers' valuations is uncertain, a BP does not allow the monopolist to achieve the profit she could earn with a full commitment. © 2011 Elsevier B.V. All rights reserved.en_HK
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/ijioen_HK
dc.relation.ispartofInternational Journal of Industrial Organizationen_HK
dc.subjectBest-price policyen_HK
dc.subjectCoase Conjectureen_HK
dc.subjectIntertemporal price discriminationen_HK
dc.titleOptimal best-price policyen_HK
dc.typeArticleen_HK
dc.identifier.emailXu, FZ: zfxu@hku.hken_HK
dc.identifier.authorityXu, FZ=rp01117en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.ijindorg.2011.02.003en_HK
dc.identifier.scopuseid_2-s2.0-80051550865en_HK
dc.identifier.hkuros203915en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-80051550865&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume29en_HK
dc.identifier.issue5en_HK
dc.identifier.spage628en_HK
dc.identifier.epage643en_HK
dc.identifier.isiWOS:000294935400010-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridXu, FZ=37030111800en_HK
dc.identifier.citeulike8837817-

Export via OAI-PMH Interface in XML Formats


OR


Export to Other Non-XML Formats