Pro-competitive Price Beating Guarantees: Experimental Evidence Article DOI:
Cite this article as: Fatás, E., Georgantzís, N., Máñez, J.A. et al. Rev Ind Organ (2005) 26: 115. doi:10.1007/s11151-004-6614-2 Abstract We report experimental results on duopoly pricing with and without price beating guarantees (PBG). In two control treatments, price beating is either imposed as an industry-wide rule or offered as a business strategy. Our major finding is that when price beating guarantees are imposed as a rule or offered as an option, effective prices are equal to or lower than those in a baseline treatment in which price beating is forbidden. Also, when price beating is treated as a business strategy, less than 50% of subjects adopted the guarantee, suggesting that, subjects realize the pro-competitive effects of the guarantee. Keywords experimental oligopolies price beating guarantees
JEL Classifications: C91, L11.
This revised version was published online in April 2005 with corrections to one of the authors’ name and to the page numbering.
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