an experimental examination of competitor based price matching guarantees we use experimental methods to demonstrate the anti competitive potential of price matching guarantees in both symmetric and asymmetric cost duopolies our findings establish that when costs are symmetric price matching guarantees significantly increase market prices in markets with cost asymmetries guaranteed prices remain high relative to prices without the use of guarantees but the overall ability of price guarantees to act as a collusion facilitating device becomes contingent on the relative cost difference lesser use of guarantees combined with lower average prices and slower convergence to the collusive level suggest that the mere presence of cost asymmetries may curtail collusive behavior

state misallocation and housing prices theory and evidence from china this paper examines the equilibrium price effects of the privatization of housing assets that were previously owned and allocated by the state i develop a theoretical framework that shows that privatization can have ambiguous effects on prices in the private market and that the degree of misallocation of the assets prior to privatization deter mines the subsequent price effects i test the predictions of the model using a large scale housing reform in china the results suggest that the removal of price distortions allowed households to increase their consumption of housing and led to an increase in equilibrium hous ing prices jel l33 018 p25 r31 r38 state participation in the housing market occurs in several forms in countries throughout the world the provision of subsidized housing as a welfare benefit to low income households is common throughout the western hemisphere in addition local governments in several cities in the united states have implemented regula tions that limit the increase of rents charged by landlords 1 this paper focuses on a form of state intervention in housing that occurs through the provision of subsidized homes to state employees the economic consequences of this area of research are potentially large as employer provided housing in the state sector is common throughout the developing world particularly in asia and sub saharan africa government regulation of the private market or the creation of a separate mar ket ensures that certain households have access to housing at prices that are below market value state interventions that aim to bring affordable housing to particu lar subsegments of the population can create economic inefficiencies they distort the decisions that individuals make regarding residential mobility joseph gyourko and peter linneman 1989 gordon a hughes and barry mccormick 1987 and employment michael svarer michael rosholm and jakob roland munch 2005 wang forthcoming and they lead to underinvestment in the construction and main

an experimental and theoretical analysis of price matching refund policies abstract price matching refund policies or offers by firms to match competitor s prices are common in both consumer and industrial marketing much of the previous theoretical work in economics suggests that price matching refunds are associated with higher prices in contrast the trade press postulates that price matching policies are associated with lower prices given these inconsistent views regarding price matching policies the authors experimentally examine how consumers view and interpret such policies and then develop a model that incorporates these consumer interpretations as well as asymmetries across stores in the model the asymmetry across stores is the key to deriving the conditions under which a signaling equilibrium exists in the presence of price matching policies the critical point is that the competition reducing and price discrimination effects which seem to form the basis of most of the previous theoretical literature can be counteracted by the presence of differentiated firms

guaranteed lowest prices do they facilitate collusion abstract the effects of a policy guaranteeing lowest price are analyzed in a two stage game where firms first decide whether to adopt such a policy and then choose prices symmetric and asymmetric games are solved to examine the extent to which prices can rise to collusive levels

on the competitive effects of price matching policies abstract this paper challenges the conventional wisdom that price matching policies lead to supracompetitive prices by reducing firms incentives to undercut rivals i argue that price matching and price beating policies are more appropriately viewed as a means of price discrimination and develop a model that demonstrates their use as such analysis of this model shows that in contrast to the results of the existing literature price matching and price beating may raise or lower equilibrium prices relative to the equilibrium in which firms may not adopt such policies

search costs sticky prices and markups this article investigates how search costs price stickiness and product durability influence the impact of inflation on firm markups we provide evidence that each of these three factors plays an independent role in influencing the responsiveness of markups to inflation although we find that the direct effect of inflation on markups is negative offsetting positive influences of inflation on markups arise in industries that produce durable experience goods with flexible prices thus our results indicate that markups of industries producing nondurable search goods with sticky prices tend to experience unambiguously negative impacts from inflation

price matching guarantees are price matching guarantees anticompetitive we examine the incentives for price matching guarantees in markets where information about prices is costly the conventional explanation of price matching as facilitating cartel pricing finds some theoretical support but our model provides an additional explanation a price matching guarantee may be a credible and easily understood means of communicating to uninformed consumers that a firm is low priced the credibility of the signal is assured by the behavior of informed consumers we contrast the testable implications of our model with those arising from two theories of price matching as anticompetitive and show that available evidence supports the signalling theory

the effect of price advertising on prices evidence in the wake of 44 liquormart the 44 liquormart decision eliminating rhode island s ban on liquor price advertising made rhode island the subject of a natural experiment for measuring the effect of advertising on prices using massachusetts prices as controls we find that advertising stores substantially cut only prices of the products that they advertise prices of other products at both advertising and nonadvertising stores do not change advertising stores cut their prices on products advertised by rivals while nonadvertising stores do not we find no reductions in price dispersion across stores newspaper advertising stores appear to draw a higher share of customers after they advertise

the intergenerational effects of compulsory schooling this article attempts to improve our understanding of the causal processes that contribute to intergenerational immobility by exploiting historical changes in compulsory schooling laws that affected the educational attainment of parents without affecting their innate abilities or endowments we examine the influence of parental compulsory schooling on children s grade for age using the 1960 1970 and 1980 u s censuses our estimates indicate that a 1 year increase in the education of either parent reduces the probability that a child repeats a grade by between 2 and 4 percentage points

on the incidence and variety of low price guarantees abstract this paper provides evidence of the incidence and variety of low price guarantees promises to match or beat a rival s price using data obtained from newspaper advertisements in 37 metropolitan areas in the united states we have a total of 515 low price guarantees in our sample we document their features and we infer firms motives and effects from these features the evidence suggests that the majority of low price guarantees are not consistent with their use as a facilitating device because they tend to apply only to rival firms advertised prices or they are associated with high hassle costs the evidence also suggests that price beating and price matching guarantees differ significantly in their features the former are associated with higher hassle costs apply disproportionately to rival firms advertised prices and are more likely to allow postsale search than are price matching guarantees

brothers household financial markets and savings rate in china abstract this study analyzes the effect of the number of brothers an individual has on that individual s household savings rate under the current underdeveloped household financial market in urban china i show that having an additional brother reduces an individual s household savings rate by at least 5 percentage points brothers help households 1 by sharing risks providing a source of informal borrowing and 2 by sharing the cost of supporting parents sisters play a minor role in affecting a household s savings rate mainly because of cultural norms the decline in the average number of brothers in households induced by population policies explained at least one third of the increased aggregate household savings rate in urban china

oligopoly experimentation of learning with simulated markets abstract learning is investigated using experimental methods agents have no information about demand conditions the same oligopoly market is finitely repeated and the only link between successive markets is that agents acquire experience over time as the game is played adaptive as well as least squares learning are tested the model of price adjustment followed by firms indicates that the non cooperative bertrand nash equilibrium constitutes an attractor to players strategies

how low is a guaranteed lowest price a game based on the bertrand duopoly model is constructed to study the effects of price guarantee policies before it chooses a list price a firm can make a binding commitment to match or beat its competitor s price the effectiveness of these price guarantee policies in facilitating price collusion depends on the solution concept used furthermore there exists an equilibrium in which neither firm offers any price guarantees and each firm sets price equal to marginal cost

output decisions and price matching theory and experiment we study the effects of price matching in a setting in which each firm selects both its price and output simultaneously we show that the availability of a price matching option leads to the cournot outcome in this setting our experimental study confirms this result in the laboratory our finding is a stark contrast to the one obtained in the standard price competition that the most likely market price in the presence of a price matching option is the monopolistic price in addition we show that price matching benefits consumers in markets with a large number of firms if a market has a few firms then the effects of price matching on consumers depend on the market demand and cost functions thus our study suggests that the effect of price matching depends on the strategic variables of the firms data and the online appendix are available at https doi org 10 1287 mnsc 2017 2788 this paper was accepted by eric anderson marketing

automated pricing rules in electronic posted offer markets i introduction electronic commerce affords the opportunity to automate the process by which buyers and sellers engage in an exchange at a mutually agreeable price for example buyers on the internet can use software agents to automate the gathering of information on price and other product attributes in online retail markets that are traditionally organized as posted offer markets 1 this technology obviously reduces the consumer transaction costs of comparing prices which presumably would induce stronger competition among sellers however as hal varian remarked in the e commerce magazine wired everybody thinks more information is better for consumers that s not necessarily true bayers 2000 215 the same technology that reduces consumer transaction costs can be employed by sellers to automate the monitoring of rivals prices which might mitigate or even overwhelm the procompetitive effect of reduced consumer search costs in addition electronic markets grant more than just ideal information on competitors pr ices with electronic commerce a seller can commit to implementing an automated algorithm that could possibly sustain tacitly collusive prices in this article we study the supply side effects of three automated pricing algorithms that use price information as an input that could be retrieved from consumer price gathering technology in an electronic market two of the three algorithms that we study have the theoretical potential to facilitate collusion low price matching and a trigger strategy the third and presumably more competitive algorithm which we refer to as undercutting is drawn from the common retail practice of beating competitors prices using the experimental method this article explores how sellers deploy these three automated pricing algorithms in electronic markets more specifically we ask 1 do sellers prefer to set their price manually or to adopt automated algorithms that adjust price more frequently 2 are markets with automated pricing algorithms more competitive or less competitive than markets with manually posted prices 3 does increased commitment to an automated pricing mechanism facilitate tacit collusion to study the impact of automated pricing on seller behavior we base our work on the model of price dispersion in retail markets by varian 1980 thus our article also explores how well a theory of mixed strategy pricing organizes the behavior of sellers in a market with a nearly continuous stream of differentially informed fully revealing customers 2 as a preview of the results we find that 1 sellers employ automated pricing algorithms more often than they manually set their own price 2a automated undercutting leads to prices similar to the game theoretic prediction 2b automated low price matching generates prices significantly higher than the game theoretic prediction 2c automated trigger pricing results in market prices below the game theoretic prediction and 3 greater commitment to automated low price matching shifts prices closer to the joint profit maximizing outcome the structure of the article is as follows section ii presents the three automated pricing algorithms we consider the experimental design and procedures are in section iii section iv presents and discusses our results and section v briefly concludes ii automated pricing algorithms the market environment is motivated by the model of sales in varian 1980 3 in this model there are n sellers that supply buyers who each desire to purchase at most one unit of a homogeneous product each seller has a commonly known constant marginal cost c of supplying a unit to a buyer and posts a price p which the buyer can accept or reject the private value v for each nonstrategic buyer is assumed to be a random variable drawn independently from a known uniform distribution with a support v v buyers differ based on the number of firms from which price quotes are received prior to making a purchasing decision

multiproduct activity in an experimental differentiated oligopoly in a symmetric differentiated experimental oligopoly with multiproduct firms we test the predictive power of the corresponding bertrand nash equilibria subjects are not informed on the specification of the underlying demand model in the presence of intense multiproduct activity and provided that a parallel pricing rule is imposed to multiproduct firms strategies tend to confirm the non cooperative multiproduct solution

time use during the great recession using data from the american time use survey between 2003 and 2010 we document that home production absorbs roughly 30 percent of foregone market work hours at business cycle frequencies leisure absorbs roughly 50 percent of foregone market work hours with sleeping and television watching accounting for most of this increase we document significant increases in time spent on shopping child care education and health job search absorbs between 2 and 6 percent of foregone market work hours we discuss the implications of our results for business cycle models with home production and non separable preferences jel codes d13 e32 j22

effective price matching a comment abstract corts economic lett 47 1995 417 showed that when allowing for price beating policies in addition to price matching policies the competitive outcome prevails in lieu of monopoly pricing i show by expanding the strategy set further to include effective price strategies the possibility of monopoly pricing is restored

a carbon market sensitive optimization model for integrated forward reverse logistics globalized supply chains volatile energy and material prices increased carbon regulations and competitive marketing pressure for environmental sustainability are driving supply chain decision makers to reduce carbon emissions enterprises face the necessity and the challenge of implementing strategies to reduce their supply chain environmental impact in order to remain competitive one of the most important strategic issues in this context is the configuration of the logistics network the decision concerning the design of an optimal network of the supply chain plays a vital role in determining the total carbon footprint across the supply chain and also the total cost therefore the logistics network should be designed in a way that it could reduce both the cost and the carbon footprint across the supply chain in this context this research proposes a quantitative optimization model for integrated forward reverse logistics with carbon footprint considerations by integrating the carbon emission into a quantitative operational decision making model with regard to facility layout decisions the proposed research incorporates carbon emission parameters with various decision variables and modifies traditional integrated forward reverse logistics model into decision making quantitative operational model minimizing both the total cost and the carbon footprint the proposed model investigates the extent to which carbon reduction requirements can be addressed under a particular set of parameters such as customer demand rate of return of products etc by selecting proper policy as an alternative to the costly investment in carbon reducing technologies to solve the quantitative model this research implements a modified and efficient forest data structure to derive the optimal network configuration minimizing both the cost and the total carbon footprint of the network a comparative analysis shows the outperformance of the proposed approach over the conventional genetic algorithm ga for large problem sizes

experimental duopolies under price guarantees in a symmetric differentiated experimental duopoly we test the ability of price guarantees pgs to raise prices above the competitive levels different types of pgs aggressive and soft price beating and price matching are implemented either as an exogenously imposed market rule or as a business strategy our results show that pgs may lead close to the collusive outcome depending on whether the interaction between duopolists is repeated and provided that the guarantee is not of the aggressive price beating type

on the use of low price guarantees to discourage price cutting abstract this paper formulates a novel test to assess whether and to what extent firms might be using low price guarantees to discourage their rivals from cutting prices the test is based on a comparison of paired observations of advertised prices that are set by competing firms at the same point in time on similar items where one price is set by a firm that has a low price guarantee and the other by a firm that does not have a low price guarantee using data on retail tire prices we find that the majority of paired observations involving firms that have price matching guarantees are consistent with what one would expect if firms were using them to discourage price cutting whereas the majority of paired observations involving firms that have price beating guarantees are not this suggests that price matching and price beating guarantees may be serving different purposes the evidence also suggests that guarantees that apply to advertised prices only may be serving different purposes than guarantees that apply to both advertised and selling prices

credit constraints job mobility and entrepreneurship evidence from a property reform in china this paper provides new evidence on the impact of private property rights on entrepreneurship i explore this issue in the context of a housing reform in urban china that allowed state employees renting state owned housing the opportunity to buy their homes at subsidized prices using the reform as an exogenous change in the capital constraints and mobility costs that inuence individuals entry

different selling strategies in bertrand oligopoly abstract i analyse a bertrand oligopoly game where firms can choose between selling strategies i price announcements ii price announcements and offers to price match i establish the set of nash equilibria and show that only the monopoly price nash equilibrium satisfies iterative dominance

on the robustness of the argument that price matching is anti competitive abstract the existing literature suggests that price matching leads to monopoly prices i show that this argument relies on an arbitrary and unrealistic restriction of the firms strategies in particular if firms may adopt price beating policies the competitive outcome prevails

a consumer perspective on price matching refund policies effect on price perceptions and search behavior although price matching refund policies are common in many retail environments the impact of such policies on consumers has largely been ignored this article reports the results of three studies that examine price matching policies from a consumer perspective study 1 shows that consumers perceive price matching policies as signals of low store prices and that the presence of a refund increases the likelihood of discontinuing price search contrary to the predictions based on signaling theory in information economics studies 2 and 3 show that when search costs are low the number of stores searched increases in the presence versus absence of a price matching policy when search costs are high consumers appear to accept the price matching signal at face value and search less in the presence of a refund the article concludes by discussing the theoretical implications of the findings and suggesting directions for future research

the shattered iron rice bowl intergenerational effects of chinese state owned enterprise reform reform of the chinese state owned enterprise soe sector in the late 1990s triggered massive layoffs 34 million employees and marked the end of the iron rice bowl guarantee of employment security for the remaining 67 million workers an expanding international literature has documented the adverse health impacts of economic insecurity on adults but has typically neglected children this paper uses the natural experiment of soe reform to explore the causal relationship between increased parental economic insecurity and children s bmi z score using province year level layoff rates and income loss from the layoffs we estimate a generalised difference in differences model with child fixed effects and year fixed effects for a medium build 10 year old boy a median treatment effect implies a gain of 1 8 kg and a 2 2 percentage point increase in the overweight rate due to the reform anxiety about potential losses causes weight gain for boys whose soe parents kept their jobs unconditional quantile regressions suggest that boys who are heavier are more likely to gain weight girls are not significantly affected intergenerational effects therefore increase the estimated public health costs of greater economic insecurity

on the possibility of price wars when firms use a tit for tat strategy abstract the purpose of this paper is to illustrate how price wars can periodically occur in an industry even when all the firms behave cooperatively and each firm has no intention of cheating by attempting to undercut the other firms