Price Deception, Market Power and Consumer Policy
نویسنده
چکیده
This paper presents a model in which a firm attempts to gain market power by pricing above the competitive market price and simply trying to persuade illinformed consumers not to search for other lower priced firms. Fictitious price comparisons, or false sale signs could be used in this way to deceptively and profitably deter consumer search. A simplified model shows how this mechanism could exist when combined with moderately enforced consumer regulatory policy. JEL Classification: D83, D82, L13, L49
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