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.
Keywords:
JEL-Classification-Number:
Creation-Date: January 1990
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