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Pricing with markups under horizontal and vertical competition

Published: 14 May 2010 Publication History

Abstract

We model a market for a single product that may be composed of sub-products that face horizontal and vertical competition. Each firm, offering all or some portion of the product, adopts a price function proportional to its costs by deciding on the size of a markup. Customers then choose a set of providers that offers the lowest total cost. We characterize equilibria of the two-stage game and study the efficiency resulting from the competitive structure of the market.

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Cited By

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  • (2012)On the efficiency of the simplest pricing mechanisms in two-sided marketsProceedings of the 8th international conference on Internet and Network Economics10.1007/978-3-642-35311-6_21(284-297)Online publication date: 10-Dec-2012

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    BQGT '10: Proceedings of the Behavioral and Quantitative Game Theory: Conference on Future Directions
    May 2010
    155 pages
    ISBN:9781605589190
    DOI:10.1145/1807406
    Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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    Published: 14 May 2010

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    • (2012)On the efficiency of the simplest pricing mechanisms in two-sided marketsProceedings of the 8th international conference on Internet and Network Economics10.1007/978-3-642-35311-6_21(284-297)Online publication date: 10-Dec-2012

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