Are low-price promises collusion guarantees? An experimental test of price matching policies

  1. Fatás Juberías, Enrique
  2. Máñez Castillejo, Juan Antonio
Revista:
Spanish economic review

ISSN: 1435-5469

Año de publicación: 2007

Volumen: 9

Número: 1

Páginas: 59-77

Tipo: Artículo

DOI: 10.1007/S10108-006-9012-0 DIALNET GOOGLE SCHOLAR

Otras publicaciones en: Spanish economic review

Resumen

In a symmetric differentiated experimental duopoly we test the ability of Price Matching Guarantees (PMG) to raise prices above the competitive levels. PMG are introduced both as a market rule (the selling price is always the lowest posted price) and as a business strategy (subjects decide whether or not to offer them). Our results show that PMG lead to a clear collusive outcome as markets quickly and fully converge to the collusive prediction if PMG are imposed as a market rule. Whenever subjects are allowed to decide whether to adopt PMG or not we observe that almost all subjects decide to adopt them and prices get very close to the collusive ones.

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