ITEM METADATA RECORD
Title: Price competition between an expert and a non-expert
Authors: Bouckaert, J ×
Degryse, Hans #
Issue Date: Aug-2000
Publisher: Elsevier science bv
Series Title: International journal of industrial organization vol:18 issue:6 pages:901-923
Abstract: This paper characterizes price competition between an expert and a non-expert. In contrast with the expert, the non-expert's repair technology is not always successful. Consumers visit the expert after experiencing an unsuccessful match at the non-expert. This re-entry affects the behavior of both sellers. For low enough probability of successful repair at the non-expert, all consumers first visit the non-expert, and a 'timid-pricing' equilibrium results. If the non-expert's repair technology performs well enough, it pays for some consumers to disregard the non-expert a visit. They directly go to the expert's shop, and an 'aggressive-pricing' equilibrium pops up. For intermediate values of the non-expert's successful repair a 'mixed-pricing' equilibrium emerges where the expert randomizes over the monopoly price and some lower price. (C) 2000 Elsevier Science BN. All rights reserved.
URI: 
ISSN: 0167-7187
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Monetary and Information Economics, Leuven
× corresponding author
# (joint) last author

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