Template-Type: ReDIF-Paper 1.0
Author-Name: Roman Fossati
Author-Name-First: Roman
Author-Name-Last: Fossati
Author-Name: Roberto Hernan González
Author-Name-First: Roberto Hernan
Author-Name-Last: González
Author-Name: Praveen Kujal
Author-Name-First: Praveen
Author-Name-Last: Kujal
Title: Is List Pricing and Discounting Procompetitive? Tacit Collusion in a Bertrand-Edgeworth Duopoly.
Abstract: List-pricing and discounting is a common practice in retail and wholesale markets. Under this pricing mechanism, a posted list price is offered to sellers in a prior stage which can then de discounted at a later in a second stage. The practice of list pricing and discounting is viewed as collusive theoretically, however, its interpretation amongst competition authorities varies from being pro-competitive to being a collusion facilitating device. We experimentally test how list pricing and discounting impact prices in a capacity constrained Bertrand-Edgeworth duopoly with symmetric and asymmetric firms. We find evidence of collusion under list pricing and discounting with symmetric as well as with asymmetric firms relative to a baseline case without the discounting stage.
Length:  30 pages
Creation-Date:  2022-11
File-URL: https://aaep.org.ar/works/works2022/4564.pdf
File-Format: Application/pdf
Number: 4564
Classification-JEL: C9, L0, L1, L4, L11, L13
Handle: RePEc:aep:anales:4564