SFB 303 Discussion Paper No. A - 277

Author: Schnitzer, Monika
Title: The Anticompetitive Potential of Best Price Clauses
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.
Creation-Date: January 1990
Unfortunately this paper is not available online. Please contact us to order a hardcopy.

SFB 303 Homepage

17.03.1998, Webmaster