Showing papers on "Limit price published in 2001"

Bookbuilding and strategic allocation

Abstract: In the bookbuilding procedure, an investment banker solicits bids for shares from institutional investors prior to pricing an equity issue. The banker then prices the issue and allocates shares at his discretion to the investors. We examine the books for 39 international equity issues. We find that the investment banker awards more shares to bidders who provide information in their bids. Regular investors receive favorable allocations, especially when the issue is heavily oversubscribed. The investment banker also favors revised bids and domestic investors. INVESTMENT BANKS COMMONLY "BUILD A BOOK" before pricing an equity issue. In the United States, it has been standard practice for a number of years. In many other countries where fixed-price offerings were traditionally used, the bookbuilding procedure is becoming increasingly common, especially for international equity issues.1 Under the formal bookbuilding procedure, the investment banker solicits indications of interest from institutional investors. Such indications consist of a bid for a quantity of shares and might include a maximum price (i.e., a limit price) or other details. The investment banker uses the information to construct a demand curve. The issue price is not set according to any explicit rule, but rather based on the banker's interpretation of investors' indications of interest. He generally sets the price at a level at which demand exceeds supply, and then allocates shares to the bidders at his discretion. Thus, the

The Evolution of Price Dispersion in the European Car Market

Abstract: Car prices in Europe are characterized by large and persistent differences across countries. The purpose of this paper is to document and explain this price dispersion. Using a panel data set extending from 1980 to 1993, we first demonstrate two main facts concerning car prices in Europe: (I) The existence of significant differences in quality adjusted prices across countries, with Italy and the U.K. systematically representing the most expensive markets. (2) Substantial year-to-year volatility that is to a large extent accounted for by exchange rate fluctuations and the incomplete response of local currency prices to these fluctuations. These facts are analysed within the framework of a multiproduct oligopoly model with product differentiation. The model identifies three potential sources for the international price differences: price elasticities generating differences in markups, costs, and import quota constraints. Local currency price stability can be attributed either to the presence of a local component in marginal costs, or to markup adjustment that is correlated with exchange rate volatility; the latter requires that the perceived elasticity of demand is increasing in price. We find that the primary reason for the higher prices in Italy is the existence of a strong bias for domestic brancs that generates high markups for the domestic firm (Fiat). In the U.K. higher prices are mainly attributed to better equipped cars and/or differences in the dealer discount practices. The import quota constraints are found to have a significant impact on Japanese car prices in Italy, France and the U.K. With respect to local currency price stability, a large percentage of the documented price inertia can be attributed to local costs, and a smaller fraction to markup adjustment that is indicative of price discrimination. Based on these results we conjecture that the EMU will substantially reduce the year-to-year volatility observed in the car price data, but without further measures to increase European integration, it will not completely eliminate existing cross-country price differences.

Price Discrimination in the Airline Market: The Effect of Market Concentration

Abstract: We test the hypothesis that price discrimination increases with competition in the airline market. Using a large cross section of tickets offered by several carriers on various routes, we approximate price discrimination with marginal implicit prices of ticket restrictions that carriers typically use to price discriminate: Saturday-night stayover re-quirements and advanced-purchase discounts. We find that the restrictions are associated with lower airfares, but that the discounts are smaller on routes with higher market concentration. The results suggest that price dispersion attributed to ticket restrictions increases as markets becomemore competitive.

The Law of One Price - A Case Study

Abstract: We use retail transaction prices for a multinational retailer to examine the extent and permanence of violations of the law of one price (LOOP). For identical products, we find typical deviations of twenty to fifty percent, though there is muted evidence for convergence over time. Such differences might be due to differences in local costs. If so, relative prices of similar products (round versus square mirrors) should be equal across countries. In fact, relative prices vary significantly across very similar goods within a product group; indeed, the ordering of common currency prices often differs for similar products. The finding suggests that differences in local distribution costs, local taxes, and probably tariffs do not explain the price pattern, leaving strategic pricing or other factors resulting in varying markups as alternative explanations for the observed divergences.

Prices and Price Dispersion on the Web: Evidence from the Online Book Industry

Abstract: Using data collected between August 1999 and January 2000 covering 399 books, including New York Times bestsellers, computer bestsellers, and random books, we examine pricing by thirty-two online bookstores. One common prediction is that the reduction in search costs on the Internet relative to the physical channel would cause both price and price dispersion to fall. Over the sample period, we find no change in either price or price dispersion. Another prediction of the search literature is that the prices and price dispersion of advertised items or items that are purchased repeatedly will be lower than for unadvertised or infrequently purchased items. Prices across categories of books appear to conform to this prediction, with New York Times bestsellers having the lowest prices as a fraction of the publisher's suggested price and random books having the highest prices. Interestingly, price dispersion does not conform with this prediction, apparently for reasons related to stores' decisions to carry particular books. One reason why we may not observe convergence in prices is because stores have succeeded in differentiating themselves even though they are selling a commodity product. We observe differentiation (or attempted differentiation) by a significant number of firms.

Competition and Price Discrimination in Yellow Pages Advertising

Abstract: This paper examines the effect of competition on second degree price discrimination in display advertising in Yellow Page directories. Recent theoretical work makes conflicting predictions about the effect of competition on curvature. Our main empirical finding is that competition increases the curvature of the price schedule, meaning that purchasers of the largest ads see their prices fall the most in response to competition. We also present evidence of menu costs in adjusting pricing schedules and address this issue in estimation. The magnitudes that we find could be relevant for welfare calculations in the face of price discrimination.

Price transmission, market power, marketing chain, returns to scale, food industry

Abstract: Recent literature emphasises the role of market structure in determining the degree of price transmission along the marketing chain, the presumption being that if downstream markets are imperfectly competitive price transmission will be less than complete. However, empirical studies of market power often ignore the role of the underlying cost conditions. This paper shows that if an industry is characterised by non-constant marginal costs, there can be a significant impact on price transmission. Specifically, it is shown that the nature of the returns to scale that characterise the food industry cost function may either increase or decrease the degree of price transmission. Under certain conditions, price transmission may be greater in industries with increasing returns to scale than in markets characterised by perfect competition and constant returns to scale. Copyright 2001, Oxford University Press.

Research Note: Consumer Heterogeneity and Competitive Price-Matching Guarantees

Abstract: Price-matching guarantees are widely used in consumer and industrial markets. Previous studies argue that they are a marketing tactic that facilitates implicit price collusion. This is because once a store adopts this marketing tactic, its rivals can no longer steal its customers by undercutting its price, and hence they have little incentive to initiate price cuts. While a store with price-matching guarantees has no fear of losing customers to rivals' price cuts, it has every incentive to raise its own price to charge a higher price to its loyal consumers. A growing body of legal literature uses this argument today to justify calls for antitrust actions against stores employing this marketing tactic. However, this theoretical conclusion baffles practitioners and industry experts. In practice, sellers typically embrace this marketing tactic in response to heavier competition and a growing bargain consciousness among shoppers. The introduction of price-matching guarantees by a store is frequently interpreted by industry observers as the initiation of a price war rather than a signal of price collusion. This assertion is supported in many instances by the fact that stores that introduce price-matching guarantees also roll back their prices and typically suffer subsequent loss of profits. Most ironically, the favorite examples used by researchers to illustrate how price-matching guarantees can enforce price collusion, Crazy Eddie and "Nobody Beats the Wiz," have subsequently either gone bankrupt or filed for federal bankruptcy protection. In this study we show that price-matching guarantees can indeed facilitate competition: The expected prices and profits can be strictly lower when all stores adopt price-matching guarantees than when they are not allowed to. This is because the adoption of price-matching guarantees generates not only a competition-dampening effect, which has been recognized in the literature, but also a competition-enhancing effect. This latter effect comes from the fact that price-matching guarantees encourage price search by those consumers who prefer to shop at a particular store but are mindful of saving opportunities. These consumers will have incentives to obtain the rival store's price when their favorite store offers price-matching guarantees to avail themselves of the lowest possible price at their favorite store. As a result, price-matching guarantees reduce the number of purchases at the store from those consumers who would have paid the full price and thus prompt a store to price more aggressively to bid for more incremental sales. This competition-enhancing effect can more than offset the competition-dampening effect in markets where consumers differ in their price search costs and store loyalty. Thus, our study casts doubt on the advisability of blanket prohibition on price-matching guarantees. Our argument relies only on consumer segmentation and on the phenomenon of periodic sales, both of which are common in retail markets. We arrive at our conclusion by incorporating bargain shoppers and opportunistic loyals into the standard sales-promotion models. In contrast, the past literature on price-matching guarantees ignores the ubiquitous phenomenon of sales in retail markets and overlooks those consumers who prefer to shop at a particular store, but are alert to saving opportunities. As a result, it is troubled by two awkward conclusions. On the one hand, price-matching guarantees simply remove rivals' incentives to undercut in price and, hence, also their incentives to run sales. This implies that the adoption of price-matching guarantees in a market will eliminate the phenomenon of sales, which is obviously counterfactual. On the other hand, in equilibrium no consumer actually invokes price-matching guarantees, as each player has incentives to close any price gap in the market. This is obviously false, based on our casual observations and our conversations with store managers. Theoretical research on the subject thus far has been overwhelmingly one-sided, and empirical or experimental studies are conspicuously lacking. We hope that our conclusion will spark further research in both directions. A healthy debate will broaden our perspective on an issue of great importance in formulating public policies and in managerial decision making.

On the Optimality of Delegating Pricing Authority to the Sales Force

Abstract: An important decision facing sales managers today is precisely how much pricing authority should be delegated to the sales force. Received theory suggests that the salesperson’s superior information about customers’ valuations will invariably make price delegation profitable for the firm. The empirical evidence, however, reveals that firms that grant full pricing authority generate lower profits than firms that limit pricing authority. Given this state of affairs, the author develops and analyzes a formal model that examines the optimality of delegating pricing authority to the sales force. The model preserves the notion of superior information assumed in the literature but considers as well a negative feature of much concern to practitioners, namely, the suboptimal substitution of selling effort by price discounting. The model reveals that providing the salesperson with full pricing authority is not always optimal. Specifically, in some environments, it is appropriate to limit pricing authority ...

Monopoly Price Dispersion Under Demand Uncertainty

Abstract: When a monopolist sets its price before its demand is known, then it may set more than one price and limit the availability of its output at lower prices. This article adds demand uncertainty and price rigidities to the standard model of monopoly pricing. When there are two states of demand and the ex post monopoly price is greater when demand is high then the monopolist's optimal ex ante pricing strategy is to set two prices and limit purchases at the lower price.

Concurrent dynamic pricing marketing and selling system

Abstract: A system for liquidating excess, returned, inventory of slow moving products to maximize gross profit. The system has a variable pricing strategy for enabling quick liquidation of unsold or returned inventory items. The system is Web based. The pricing strategy is interactive, and includes a flexible current price, an open order mechanism, a facility for a demand price and a buyer auction scheme. Sellers interact with the system to set minimum prices and permitted increments of changes in price when prices vary. Buyers can choose to acquire a certain amount of a product at the current price, or set an amount they are willing to pay after a particular period of time. Sellers can adjust prices based on buyer responses and arrive at an optimal pricing strategy over a given period of time to meet their requirements for inventory liquidation. The system can be used in on-line shopping forums and is available through a number of access points including affiliated websites, distributor and manufacturer websites and portal type websites. The system permits the liquidation of excess or returned inventory in a desired amount of time with an improved recovery price.

Market power and price volatility in restructured markets for electricity

Abstract: The restructured market for electricity in the UK has experienced a systematic pattern of price spikes associated with the use of market power by the two dominant generators. Partly in response to this problem, the share of capacity owned by any individual generator after restructuring was limited in Victoria, Australia. As a result, a much more competitive market resulted with prices substantially lower than they were under regulation. Nevertheless, an erratic pattern of price spikes exists and the price volatility is a potential problem for customers. This paper argues that the use of a uniform price auction (UPA) for electricity markets exacerbates price volatility. A discriminatory price auction (DPA) is proposed as a better alternative that would reduce the responsiveness of price to errors in forecasting total load.

The Race to the Bottom

Abstract: When industries deregulate, their managers face unfamiliar challenges. Price wars are often the unfortunate--and unnecessary--result. The wrong pricing strategy can destroy corporate value faster than almost any other business mistake. And when industries are about to be deregulated, managers habitually adopt ill-conceived pricing policies that are almost guaranteed to damage their companies and erode services to customers and the community. These flawed pricing policies--common among deregulating telecommunications, transportation, and utility companies as well as other businesses--represent efforts to hang on to customers. Managers cut prices preemptively to fend off new rivals and then launch full-fledged price wars in hopes of outlasting attackers and emerging victorious from the rubble. This, at any rate, is the hope; the reality is usually quite different. One example of such pricing behavior comes from the Chilean telecommunications sector, which deregulated in 1994. Before then, Empresa Nacional de Telecomunicaciones (Entel) had been the sole provider of domestic and international long-distance services, but with the coming of deregulation Entel had to compete against seven rivals. At first, hoping to keep its customer base intact, it joined in a price war. By the end of 1994, rates for calls from Chile to the United States had fallen by about 95 percent, and domestic long-distance rates had collapsed similarly (Exhibit 1, on the next page). Despite the price cuts, Entel lost nearly 70 percent of the domestic long-distance market and more than half of the international one. After 1994 Entel stopped competing on price. Differentiating itself from competitors on the basis of service and broad product offerings, it began charging a premium over the rates of its largest rival. New entrants continued to threaten Entel's international business, but by the late 1990 s the company had recovered some of its domestic long-distance market share. Germany's electricity market provides another example. After deregulation, in 1998, some of the country's largest incumbent utilities cut prices preemptively to dissuade customers from jumping to Yello Strom, an aggressive new competitor. Within two years, the average market price of energy had dropped by about 30 percent. As a result of these price cuts, incumbent suppliers saw their profits tumble--a high price to pay for an attempt to keep the customer base intact. Prices rebounded in 2001 as even attackers complained of low or nonexistent margins. At the year's start, Yello, for instance, raised its prices by 18 percent, including an energy tax that accounted for three percentage points of the increase. Lower prices for customers are among the primary goals of most deregulation efforts. Of course, increased competition can indeed prompt former monopolies to search for greater efficiencies, thus reducing costs and, potentially, prices. But if misguided policies spur struggles that bring prices below the level needed to cover costs, neither companies nor consumers win, since the former may be so crippled that they can no longer guarantee basic supplies and services to the latter. And if a price war succeeds in destroying all attackers, a shattered market will be left with little competition. In most cases, established companies launch price wars believing that once the dust has settled, prices will rise again. But psychologically and politically, it can be far more difficult to orchestrate a price increase than a price cut. Throw a stubborn attacker into the mix, and incumbents can find themselves trapped in unsustainable rate structures. In our analysis, optimal prices for incumbents can be as much as 20 percent higher than those they actually set. Even then, average market prices will likely fall from monopoly levels, and incumbents must be prepared to lose some of their customer base. Nonetheless, if the right factors influence their pricing decisions, they and the market will remain healthier. …

Price and quality in the UK childcare market

Abstract: Childcare subsidies are typically advocated as a means to making paid employment profitable for mothers, but also have important ramifications for the use and quality of paid childcare. Even if one is concerned primarily with the quantity aspect, the quality dimension cannot be ignored. This paper provides an exposition of the potential biases in estimates of price elasticities with respect to quantity that do not allow for quality variation or for the possibility of non-linear pricing structures. Using an approach developed in the demand estimation literature, a price measure addressing these issues is derived and the importance of using this measure is tested using British data. Price is found to have a negative impact on the use of formal paid care, the hours purchased and the quality chosen. However, failure to control for quality effects and non-linearities in the price measure is shown to generate significant overestimates of the price elasticities.

The Size and Frequency of Price Changes: Evidence from Grocery Stores

Abstract: We analyze a data set (on grocerystore prices for lettuce) with many advantages overthose used previously to explain firm heterogeneity inthe size and frequency of price changes. Despitecommon shocks to their input price, grocers' pricechanges vary widely in size and frequency. We testhypotheses emerging from a theoretical framework. Wefind that product, firm, and market characteristicsassociated with the benefits from and costs ofchanging price explain grocer-to-grocer variation inthe size and frequency of price changes. Moreconcentrated markets, larger firm size, and thinnerproduct markets lead to infrequent and large pricechanges.

Relative Price Level of 99-Ending Prices: Image Versus Reality

Abstract: Consumer research has indicated that the use of the 99 ending in a retail price creates the impression of a price that is relatively low. A comparative price survey of a wide assortment of general merchandise products indicates that this impression does not match marketplace reality. On the contrary, the price survey showed that retail prices with 99 endings were less likely than prices with other endings to be among the lower prices for an item. The finding of this discrepancy has implications for consumers, public policy-makers, and our understanding of how consumers make inferences from price information.

The Impact of Household Level Heterogeneity in Reference Price Effects on Optimal Retailer Pricing Policies

Abstract: The field of marketing has witnessed substantial improvement in modeling household level heterogeneity. However, relatively little has been written about how modeling household heterogeneity translates into better marketing decisions. In this paper, we study the impact of household level heterogeneity in reference price effects on a retailer's pricing policy. Reference prices are certain anchors or standards that households use to compare the observed purchase price of a product against. If the observed price is greater than the reference price it is perceived as a "loss". On the other hand, if the observed price is less than the reference price it is perceived as a "gain". In order to study the impact of heterogeneity in reference price effects on retail pricing, we use a hierarchical Bayes nested logit model that provides estimates for gain and loss effects at the household level. Using these household level estimates, we develop a normative pricing policy for a retailer maximizing category profit. In the empirical analysis, we find that although at the aggregate level (i.e. average across households) the impact of a gain and loss is about the same, for a number of households a gain has higher impact than a corresponding loss. Our results indicate that the optimal pricing policy derived from the heterogeneous case is qualitatively different from the case when heterogeneity is ignored. We suggest that when there is household heterogeneity in reference price effects, it is important for a retailer to (a) consider the joint distribution of gain and loss effects among the households and (b) promote brands that have a higher preference among the "gain-seeking" households. Retail pricing policy based upon a model that incorporates household heterogeneity is also shown to be more profitable. Further, the purchase incidence increases when household heterogeneity is considered in the pricing policy. The primary contribution of this paper is to demonstrate the pricing and category profit implications of incorporating heterogeneity in reference price effects for a retailer. We show that for an important marketing problem pertaining to a retailer, the optimal pricing decisions for various brands in a category are inextricably related to household heterogeneity in reference effects and brand preference.

Pricing for Profitability: Activity-Based Pricing for Competitive Advantage

Abstract: Acknowledgements. Preface. Pricing for Profitability. Economics and Demand. Competitive Strategy and Pricing. Understanding Pricing Strategy. Costs. Activity-Based Costing. Activity-Based Pricing. Activity-Based Pricing Models. Influence of Capacity Utilization. Target Pricing. Price Negotiations. Conclusions and Summary. Glossary. Index.

Dynamic Pricing on the Internet: Theory and Simulations

Abstract: As is the case with traditional markets, the sellers on the Internet do not usually know the demand functions of their customers. However, in such a digital environment, a seller can experiment different prices in order to maximize his profits. In this paper, we fit the dynamic pricing model of Rothschild (1974) to match the pricing problem of a Web-store. In this setting, we define the optimization problem of a Web-store and by simulations we study the price dynamics that can appear when all the sellers on a given market follow an optimal pricing policy.

Getting prices right on the Web

Abstract: Two widely disparate approaches to pricing have dominated the sale of goods and services on the Internet. In the rush to capture first-mover advantage, many start-ups have offered untenably low prices. Because the Internet, the reasoning goes, is the most transparent and efficient of markets, low prices--for both consumers and businesses--outweigh such factors as product benefits, quality, and service. Many incumbents, by contrast, have largely neglected on-line pricing and simply transferred their off-line prices to the Internet. They may have done so in the belief that their brand strength inoculates them against the threat posed by their new competitors. More likely, they felt pressure to establish an on-line presence before they had a chance to weigh the complexities of multichannel pricing. But on-line customers are neither slaves to prices nor clones of traditional shoppers. Instead, they base their buying decisions on a wide range of factors. Far from being a price destroyer, the Internet can bring new detail to pricing strategy, creating enormous value. But companies must act quickly and rethink their on-line policies before habit and customer expectations make change difficult if not disastrous. The reality of e-pricing Low-price strategies aren't without foundation. Indeed, of the various reasons to shop on-line, consumers cite price most frequently. [1] But an analysis of consumer click-through behavior reveals that most buyers do very little cross-shopping (Exhibit 1). A separate study of on-line shoppers in North America reveals that only 8 percent of Internet users are aggressive bargain hunters. [2] Most of the remainder keep returning to the same sites. Now, the primary goal of businesses that buy on-line is cutting the total cost of ownership. On its face, this might suggest that they are more likely than retail consumers to shop for the best price. But in on-line business-to-business (B2B) markets too, factors other than price are driving most buyers' choices. In a recent McKinsey study, only 30 percent of purchasing managers identified lower prices as the key benefit of buying on-line. B2B purchasing managers said that they expected the primary benefits to be lower transaction and search costs--for example, less time required for paperwork-and automated purchasing information that permits them to track their purchases and to make better purchasing decisions. When asked to identify the source of these cost savings, only 14 percent said that they would come from the suppliers' lower profit margins, so buyers clearly recognize the benefit, to both themselves and suppliers, of reduced transaction costs. Business behavior confirms such findings. Half of the companies buying through reverse auctions don't choose the cheapest supplier. [3] Also, 87 percent of the buyers that didn't choose the cheapest supplier stayed with their current ones, even at a higher price. Overall, only 15 percent of companies that make purchases over the Internet have even tried reverse auctions. Only 3 percent intend to continue using them in 2001. Three ways to profit from the flexibility of e-pricing Neither business-to-consumer (B2C) price insensitivity nor B2B purchasing behavior means that on-line suppliers can raise prices indiscriminately. While price may not be the most important factor, it is one of several that consumers weigh before making on-line purchasing decisions. It is critical that prices, both on- and off-line, be competitive so customers can meet strategic volume and profit objectives. Price changes that appear capricious or, worse, deceptive can cause long-term damage to a company's price proposition. The Internet gives companies that respect such constraints better information about who their customers are. It also gives these companies the flexibility to set the maximum price customers would be willing to pay and to adjust that price instantly as circumstances change. …

Sales transactions for transfer of commodities

Abstract: A method for transacting transfers of commodities involves observing the price of a commodity at several observation points over a period of time. In one embodiment, a maximum price is specified. For each observation point, the maximum price is selected in the event the observed price is greater than the maximum price, or the observed price is selected in the event the observed price is less than the maximum price. The price for a quantity of the commodity then is calculated based on the average of the selected prices and a premium. Individual contracts can be aggregated to reach more acceptable trading quantities and intervals, enabling participation of a derivative hedging products service provider and intermediate parties such as resellers and reseller services companies. Aggregation can be carried out manually or automatically, and configured to support anonymity of various parties in the transaction chain.

Trading Inefficiencies in California's Electricity Markets

Abstract: We study price convergence between the two major markets for wholesale electricity in California from their deregulation in April 1998 through November 2000, nearly the end of trading in one market. We would expect profit-maximizing traders to have eliminated persistent price differences between the markets. Institutional impediments and traders' incomplete understanding of the markets, however, could have delayed or prevented price convergence. We find that the two benchmark electricity prices in California -- the Power Exchange's day-ahead price and the Independent System Operator's real-time price -- differed substantially after the markets opened but then appeared to be converging by the beginning of 2000. Starting in May 2000, however, price levels and price differences increased dramatically. We consider several explanations for the significant price differences and conclude that rapidly changing market rules and market fundamentals, including one buyer's attempt to exercise a form of monopsony power, made it difficult for traders to take advantage of opportunities that ex post appear to have been profitable.

Accounting for Changing Prices: The Value Relevance of Historical Cost, Price Level, and Replacement Cost Accounting in Mexico

Abstract: This paper investigates the value relevance of historical cost, price level and replacement cost accounting using a sample of Mexican firms from 1989 to 1995. It contributes to prior research by distinguishing between two distinct aspects of changing prices:(1) the change in the general price level, and (2) the change in the value of specific non-monetary assets. I select Mexico to examine because it is unique in requiring and disclosing separately price level and replacement cost adjustments. A sample of Mexican firms also addresses a key reason cited for mixed results in previous assessments of the usefulness of price level and replacement cost accounting using United States data: the effects of inflation are too weak to detect. High rates of inflation in Mexico, ranging between 7% and 52% during the sample period, mitigate that potential problem. Results indicate that replacement cost adjustments are relatively and incrementally relevant beyond historical cost and price level measures while price level adjustments are incrementally value relevant beyond historical measures.

Electronic commerce product pricing and selection system and method

Abstract: An electronic commerce product pricing and selection system and method is disclosed. A product cost and a product attribute corresponding to a product are first received from a vendor via a communications network. A sale price is then determined for the product using the product cost and a competitive price is determined using the product attribute. The sale price and the competitive price are then compared and the product is displayed for sale on a website at the sale price if the sale price is determined to be within a predefined range or threshold of the competitive price.