A rationale for repealing the 1987 Groceries Order
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|Title:||A rationale for repealing the 1987 Groceries Order||Authors:||Whelan, Ciara
Walsh, Patrick P.
|Permanent link:||http://hdl.handle.net/10197/127||Date:||1999||Abstract:||A ban on pricing below cost was implemented under the 1987 Groceries Order based on the premise that loss leading used in multi-product retail pricing distorts competition and exploits consumers in the short run, while driving a more concentrated structure and reducing welfare in the long run. Loss leading is examined for multi-product retailers selling in imperfectly competitive market niches with imperfect consumer information. We develop a theoretical argument in a simple two-stage framework that illustrates how loss leading on a subset of products is an equilibrium outcome of price competition that leaves overall welfare equal to that observed under laissez faire.||Type of material:||Journal Article||Publisher:||Economic and Social Research Institute (ESRI)||Copyright (published version):||ESRI, 1999||Subject LCSH:||Grocery trade--Law and legislation
|Language:||en||Status of Item:||Peer reviewed|
|Appears in Collections:||Politics and International Relations Research Collection|
Geary Institute Research Collection
Economics Research Collection
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