Abstract
The main contribution of this paper is a method that allows one to study the effects of different degrees of competition. We find that optimal prices and profits are more sensitive to cooperative than to aggressive behavior on the part of competitors. With more aggressive policies, the average pricing level decreases and the average difference between high and low prices increases. An empirical model of the detergent market illustrates the methodology.
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Natter, M., Hruschka, H. Evaluation of Aggressive Competitive Pricing Strategies. Marketing Letters 9, 337–347 (1998). https://doi.org/10.1023/A:1008037416684
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DOI: https://doi.org/10.1023/A:1008037416684