Document de travail

Negative consumer value and loss leading

Stéphane Caprice et Shiva Shekhar

Résumé

Large retailers competing with smaller stores that carry a narrower range can exercise market power by pricing below cost for some of their products. Below-cost pricing arises as an exploitative device rather than a predatory device (e.g., Chen and Rey, 2012). Unlike standard textbook models, we show that positive consumer value is not required in these frameworks. Large retailers can sell products offering consumers a negative value. We use this insight to revisit some classic issues in vertical relations.

Mots-clés

Multi-product retailers; loss-leading; negative consumer value;

Codes JEL

  • L13: Oligopoly and Other Imperfect Markets
  • L81: Retail and Wholesale Trade • e-Commerce

Référence

Stéphane Caprice et Shiva Shekhar, « Negative consumer value and loss leading », TSE Working Paper, n° 17-835, août 2017.

Voir aussi

Publié dans

TSE Working Paper, n° 17-835, août 2017