Advertised Meeting-the-Competition Clauses: Collusion Instead of Price Discrimination

Posted by D. Daniel Sokol

Oliver Budzinski (Department of Environmental and Business Economics, University of Southern Denmark) and
Jürgen-Peter Kretschmer (Economic Policy Unit, Philipps-University of Marburg, Germany) discuss Advertised Meeting-the-Competition Clauses: Collusion Instead of Price Discrimination.

ABSTRACT: Pricing strategies may include the advertising of meeting-the-competition clauses (MCCs). We show in a specific spatial model scenario with differently informed consumers that MCCs primarily serve as a device to facilitate collu-sion instead of allowing for price discrimination between these consumers.