Price Discrimination at Retail: The Supermarket Case

Holton, Richard H.

doi:10.2307/2097745

Cited by 46 publications

(22 citation statements)

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“…3 See Marquez (1997) for an extension of this model in which fixed costs vary across firms. 4 Holton (1957) documented the loss-leading practice in the supermarket sector. 5 The set of possible prices is either a primitive of the model or is implied by endowments and preferences.…”

Section: Modelmentioning

confidence: 99%

Multiproduct price competition with heterogeneous consumers and nonconvex costs

Braido

2009

Journal of Mathematical Economics

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Section: Modelmentioning

confidence: 99%

Multiproduct price competition with heterogeneous consumers and nonconvex costs

Braido

2009

Journal of Mathematical Economics

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“…Hence, it would not be relevant for our purposes to assume a price competition for each specific product between the different supermarket chains. Moreover, since Holton (1957) the theoretical literature dealing with retailing has taken shopping costs into account. These shopping costs are important to consider because consumers usually buy several products in a store.…”

Section: Benchmark Modellingmentioning

confidence: 99%

Private labels and public quality standards: How can consumer trust be restored after the mad cow crisis?

2006

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In those sectors faced with questions of food safety (meat, fruit, vegetables), new private labels have been set up in Europe in order to restore consumer trust. In this paper, we perform a theoretical analysis of these private labels. We propose an original model of vertical relationships between producers and retailers which takes into account two supply sources through (i) a competitive spot market on which the retailers buy a minimum quality standard product and (ii) supply contracts aimed at marketing higher quality private labels. We study how producers and retailers could cooperate in setting up these new labels. From a public point of view, we show the complementarity of a moderate increase in public quality standards and the creation of these new private labels. Copyright Springer Science + Business Media, LLC 2006Vertical relationship, Retailer, Food safety, Minimum quality standard, Private labels,

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“…Below-cost pricing has gained in importance as consumers increasingly prefer one-stop shopping and, thus, tend to bundle their purchases in order to economize on their shopping time. From a retailer pricing perspective, one-stop shopping leads to complementarities among products even if they constitute substitutes, complements or independent goods from a consumption point of view (Holton 1957, Bliss 1988, Betancourt and Gautschi 1990, Beggs 1994. It is well known that …rms o¤ering at least two complementary goods may …nd it pro…table to sell one of them below marginal costs in order to increase the demand for the other good (Ramsey 1927 andRobinson 1933).…”

Section: Introductionmentioning

confidence: 99%

Complementarities, Below-Cost Pricing, and Welfare Losses

Schlippenbach

2008

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe analyze below-cost pricing in retail markets and examine its impact on social welfare as well as on suppliers' incentives to invest in quality. Considering negotiations about a linear wholesale price between the retailer and her suppliers, we …nd that below-cost pricing aggravates the double marginalization problem and causes welfare losses compared to a regime where below-cost pricing is banned. Furthermore, suppliers have stronger incentives to invest in high-quality products if a ban of below-cost pricing is enforced. JEL-Classi…cation: L22, L42

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Price Discrimination at Retail: The Supermarket Case

Cited by 46 publications

References 0 publications

Multiproduct price competition with heterogeneous consumers and nonconvex costs

Multiproduct price competition with heterogeneous consumers and nonconvex costs

Private labels and public quality standards: How can consumer trust be restored after the mad cow crisis?

Complementarities, Below-Cost Pricing, and Welfare Losses

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