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Caprice, Stéphane
and Shekhar, Shiva
(2019)
Negative market value and loss leading.
Economics Bulletin, vol. 39 (n° 1).
pp. 94-103.
This is the latest version of this item.
Abstract
Multi-product retailers competing with smaller retailers can exercise market power by pricing below cost products also offered by smaller rivals. Loss-leading is not a predatory strategy: rather pro-competitive justifications are invoked. Unlike standard textbook models, we show that positive market value, that is, consumer valuation larger than production cost, is not required in this line of research examining the phenomenon of loss-leading. Multi-product retailers can supply products offering negative market value. We use this insight to revisit some classic issues in vertical relations.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | January 2019 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Multi-product retailers, loss-leading, negative consumer value |
| JEL Classification: | L13 - Oligopoly and Other Imperfect Markets L81 - Retail and Wholesale Trade; Warehousing; e-Commerce |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 21 Jan 2019 13:13 |
| Last Modified: | 10 Sep 2021 11:32 |
| OAI Identifier: | oai:tse-fr.eu:33245 |
| URI: | https://publications.ut-capitole.fr/id/eprint/30823 |
Available Versions of this Item
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Negative consumer value and loss leading. (deposited 16 Apr 2018 15:25)
- Negative market value and loss leading. (deposited 21 Jan 2019 13:13) [Currently Displayed]
