Regulation through reference prices
In: Estudios Económicos, Jg. 39 (2024-02-01), Heft 1
Online
academicJournal
Zugriff:
We analyze the role of reference prices on competition and welfare in a circular city model where paying prices above a reference negatively affects consumers' utility. Agents interact in a three-stage game. First, a policymaker chooses a reference price; second, firms make their entry decision; finally, firms compete in prices while consumers make their consumption decisions. We find that the market price and the optimal reference price always coincide in equilibrium, reducing consumer prices and implying a net welfare gain.
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Regulation through reference prices
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Autor/in / Beteiligte Person: | Salgado-Torres, Alfredo |
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Zeitschrift: | Estudios Económicos, Jg. 39 (2024-02-01), Heft 1 |
Veröffentlichung: | El Colegio de México, A.C., 2024 |
Medientyp: | academicJournal |
ISSN: | 0188-6916 (print) ; 0186-7202 (print) |
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