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Hoe Sang Chung and Min Kim
''Low-price guarantees and pricing behavior: evidence from hypermarkets in Korea''
( 2016, Vol. 36 No.2 )
This study examines the relationship between a low-price guarantee and the price competition among three leading hypermarkets in Korea. Using retail price data for individual products, we find that after the guarantee, the price-matching store and its mentioned rival increase their prices while the non-mentioned competitor decreases its prices. The reason for such pricing patterns is discussed as well.
Keywords: Low-price guarantees, Cartel-facilitating devices, Signals of low prices
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Dec 24 2015 Manuscript Accepted : Jun 22 2016

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