Catalog competition: Theory and experimental evidence
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Other documents of the author: Xefteris, Dimitrios; Barreda-Tarrazona, Iván; García-Gallego, Aurora; Georgantzis, Nikolaos
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Title
Catalog competition: Theory and experimental evidenceAuthor (s)
Date
2022-07-06Publisher
WileyBibliographic citation
XEFTERIS, Dimitrios, et al. Catalog competition: Theory and experimental evidence. Economic Inquiry, 2022.Type
info:eu-repo/semantics/articleVersion
info:eu-repo/semantics/publishedVersionSubject
Abstract
This paper compares the standard location-then-pricing Hotelling duopoly with a catalog competition game in which firms simultaneously decide locations and prices. We consider a three-location space and continuous ... [+]
This paper compares the standard location-then-pricing Hotelling duopoly with a catalog competition game in which firms simultaneously decide locations and prices. We consider a three-location space and continuous pricing and fully characterize the unique symmetric equilibrium. In both games, firms employ mixed strategies, producing a mainstream product more often than a specialized one. In the catalog game, prices are always above the marginal cost of production, whereas in the sequential model, prices converge to the marginal cost when firms produce the same variety. We experimentally test our theoretical predictions in the laboratory, finding strong evidence in favor of most of them. [-]
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Economic Inquiry, 2022Funder Name
Universitat Jaume I | Ministerio de Ciencia y Tecnología, Spain | Agence Nationale de la Recherche | Generalitat Valenciana
Project code
UJI-B2021-23 | RTI2018-096927-B-100 | ANR-18-CE26-0018 | AICO/2021/005
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© 2022 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.
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info:eu-repo/semantics/openAccess
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