Price Deception, Market Power and Consumer Policy

This paper presents a model in which a firm attempts to gain market power by pricing above the competitive market price and simply trying to persuade ill-informed consumers not to search for other lower priced firms. Fictitious price comparisons, or false sale signs could be used in this way to deceptively and profitably deter consumer search. A simplified model shows how this mechanism could exist when combined with moderately enforced consumer regulatory policy.

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Year of publication:	2004-09
Authors:	Wilson, Chris
Institutions:	Centre for Competition Policy, University of East Anglia
Subject:	Price communications \| search deterrence \| market power \| cheap talk

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 04-1 27 pages
Classification:	D83 - Search, Learning, Information and Knowledge ; D82 - Asymmetric and Private Information ; L13 - Oligopoly and Other Imperfect Markets ; L49 - Antitrust Policy. Other
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004968059