Market competition may lead to mismatch between supply and demand. That is, overpricing may give rise to underselling, and underpricing may yield stockout. Capacity sharing is a common practice to align excessive capacity with excessive demand. Yet the strategic interaction between competition and capacity sharing has not been adequately addressed. In this paper we investigate optimal strategie...

Reference-Dependent Utility, Product Variety and Price Competition Products such as iPhone, Coca-Cola and Tide serve as the standard against which consumers evaluate other members of the category. Empirical evidence suggests consumers care about not only the consumption utility derived from a product but also the gain-loss utility in comparison to the reference product of the category. This pap...

T paper investigates the effects of a limited consumer memory on the price competition between firms. It studies a specific aspect of memory—namely, the categorization of available price information that the consumers may need to recall for decision making. This paper analyzes competition between firms in a market with uninformed consumers who do not compare prices, informed consumers who compa...

This paper examines the relationship between changes in telecommunications provider competition on international long distance routes and changes in prices on those routes. Overall, increased competition is associated with significantly lower prices to consumers of long distance services. However, the relationship between competition and price varies according to the type of long distance plan ...

Advance selling before the time of consumption is now possible for even very small service providers, given new technologies (specifically, web-based transactions, biometrics and smart card technology). Moreover, recent research has revealed that advance selling can substantially improve profits without traditional price discrimination. However, that research was limited to monopoly settings. T...

C become satiated with a product when purchasing too much too quickly. How much is too much and how quickly is too quickly depends on the characteristics of the product relative to the time interval between consumption periods. Knowing that, consumers allocate their budget to products that generate less satiation effects. Retailers should then choose to sell products that induce minimal satiati...

This paper examines the economy-wide consequences of regulatory reform, with particular focus on price-cap regulation and competition regulation in Australia’s services industries. A general equilibrium model is used where oligopolistic firms produce differentiated products and interact on prices with tacit collusion represented by conjectural variations parameters. When capital stocks are fixe...

With a reverse-pricing mechanism (sometimes referred to as a Name-Your-Own Price or NYOP format), a prospective buyer submits a bid for a seller’s product, and a sale occurs only if the bid exceeds a hidden threshold price. This paper models the impact of three factors in such a market: 1) customer sophistication, i.e., whether buyers can correctly anticipate the seller’s procedure for setting ...

This paper is part of a larger research project on the evolution of the Perfect Competition concept in a historical perspective. We try to follow the changes this concept has gone through from the different alternative views during the so–called “Marginal Revolution” towards the consolidation of the price–taker hypothesis. Some recent theoretical developments have underlined the importance of g...