We analyse the effects of predation in a vertical differentiation model, where the highquality incumbent is able to price discriminate while the low-quality entrant sets a uniform price. The incumbent may act as a predator, that is, it may price below its marginal costs on a subset of consumers...

We analyse the effects of predation in a vertical differentiation model, where the high-quality incumbent is able to price discriminate while the low-quality entrant sets a uniform price. The incumbent may act as a predator, that is, it may price below its marginal costs on a subset of consumers...

In this paper we adopt a vertical differentiation model to study the effect of deregulation in the airline industry. In particular, we focus on the entry of low cost companies, which succeed in providing essential flight services at relatively cheap prices. We argue that the entry of very...

We analyze below-cost pricing in retail markets and examine its impact on social welfare as well as on suppliers' incentives to invest in quality. Considering negotiations about a linear wholesale price between the retailer and her suppliers, we find that below-cost pricing aggravates the double...

The recent developments in information technology (IT) have enabled firms to employ personalized pricing. Should all firms employ personalized pricing even though the adaptation costs of such pricing strategies are not high? This paper theoretically demonstrates a situation in which all firms do...

Tacit knowledge (TK) is a core value element important for obtaining a competitive edge for Customer Relationship Management (CRM). CRM is recognized of high value for integrating knowledge in marketing function. The focus on explicit knowledge so far has resulted in neglecting the importance of...

We present a theoretical model in tourism economics, assuming that the market for tourism is an oligopoly with differentiated products. Destinations (i.e., countries, regions, sites or even firms) can invest in order to improve their carrying capacity that can be interpreted as the stock of...

On an increasing scale auctions are used to allocate the licenses tooperate on markets which are thought notsuited for free entry. According to standard economic arguments, thelicense fees paid at the auction will notaffect consumer prices since they constitute a sunk cost. Thisstandard view is...

Despite the mixed empirical evidence, many economists stillhold to the view that Internet will promote competition betweenfirms,thereby lowering prices and increasing economic welfare. This paperpresents a search model that provides a different view. We analyzethemarket for a homogeneous good...