Firms signal high quality through high prices even if the market structure is highly competitive and price competition … business to rival firms with higher probability. Some of the revealing equilibria involve high degree of market power (price …

We present a diagrammatic and step-by-step analysis of price signaling quality. Because quality is a continuum on the … real positive line, out-of-equilibrium beliefs need not be specified, i.e., every positive price is a positive outcome in … equilibrium. We first study the behavior of the monopoly when price conveys information about quality. We then show the effect of …

price equilibrium and a price signalling equilibrium coexist. This is in contrast to the received wisdom that price … signalling of quality is nonviable in static settings. We also show that the seller's profit is always higher in the price … signalling equilibrium than in the uniform price equilibrium, but the consumer surplus and social welfare may be higher in either …

A key to the Coase conjecture is the monopolist’s inability to commit to a price, which leads consumers to believe that … a high current price will be followed by low future prices. This paper studies the robustness of the Coase conjecture … a price (i.e. she may be a commitment type). Consequently, consumers are no longer certain that the price will change …

We study the price rigidity of regular and sale prices, and how it is affected by pricing formats (i.e., pricing … strategies). We use data from three large Canadian stores with different pricing formats (Every-Day-Low-Price, Hi-Lo, and Hybrid … regular prices as displayed on the store shelves. We combine these data with two "generated" regular price series (filtered …