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We investigate a firm's choice of prices and qualities of a product line to signal competitive advantage to potential entrants and to discourage entry. The market consists of customer segments with different valuations for product quality. We demonstrate that a higher quality and a higher price...
Persistent link: https://www.econbiz.de/10009191406
We study the signalling strategy of a principal who is privately informed about its high demand potential to an uninformed risk-neutral agent. We analyze the model in the context of a contract between a franchisor and a franchisee. We examine the distortions of a two-part pricing scheme...
Persistent link: https://www.econbiz.de/10009197518
The Robinson-Patman Act (RP), an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. To avoid costly penalties under RP, managers take a variety of precautions when pricing to retailers and wholesalers. But how likely is a court to find a...
Persistent link: https://www.econbiz.de/10009208512
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