Template-Type: ReDIF-Paper 1.0
Title: The Anticompetitive Potential of Best Price Clauses
Author-Name: Monika Schnitzer

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Abstract: The game theoretic discussion of best price clauses has 
 alway implicitly been based on a durable good model with one 
 generation of consumers. This paper argues that the intuition 
 derived from this set up is misleading. By comparison with an 
 overlapping generation model it is shown that the one 
 generation model underestimates the anticompetitive potential 
 of best price clauses in the durable good case. Furthermore 
 best price clauses are also used in a perishable good context 
 with long term contracts. It is pointed out that in this 
 context the collusion facilitating impact relies on a different 
 mechanism which is much less effective than in the durable good 
 context.
Series: Sonderforschungsbereich 303, University of Bonn, Germany

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Creation-Date: 1990-01
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Handle: RePEc:bon:bonsfa:277