search query: @indexterm market research / total: 2057
reference: 232 / 2057
| Author: | Bouckaert, J. Degryse, H. |
| Title: | Price competition between an expert and a non-expert |
| Journal: | International Journal of Industrial Organization
2000 : AUG, VOL. 18:6, p. 901-923 |
| Index terms: | Equilibrium analysis Pricing Policy Competitive advantage Consumer behaviour Economic theory Market research Models |
| Language: | eng |
| Abstract: | This paper characterizes price competition btw. an expert and a non-expert. In contrast with the expert, the non-expert's repair technology is not always successful. Consumers visit the expert after experiencing an unsuccessful match at the non-expert. This re-entry affects the behaviour of both sellers. For low enough probability of successful repair at the non-expert, all consumers first visit the non-expert, and a timid-pricing equilibrium results. If the non-expert's repair technology performs well enough, it pays for some consumers to disregard the non-expert a visit. They directly go to the expert's shop, and an aggressive-pricing equilibrium pops up. For intermediate values of the non-expert's successful repair a mixed-pricing equilibrium emerges where the expert randomizes over the monopoly price and some lower price. |
SCIMA