scispace - formally typeset
Search or ask a question
Topic

Limit price

About: Limit price is a research topic. Over the lifetime, 4865 publications have been published within this topic receiving 148546 citations.


Papers
More filters
Journal ArticleDOI
TL;DR: In this paper, a large unpublished data set about the prices by store of 381 products collected by the Israeli Bureau of Statistics during 1991-1992 in the process of computing the CPI was used.

154 citations

Posted Content
TL;DR: This work uses quarterly data from 2007 to 2010 and finds empirical evidence for differentiated price setting strategies by firm types, ranging from price decreases of -13.1% (branded generics firms) to increases of +2.0% (innovators) following the introduction of potential reductions in co-payments.
Abstract: Many countries with national health care providers and health insurances regulate the market for pharmaceuticals to steer drug demand and to control expenses. For example, they introduce reference pricing or tiered co-payments to enhance drug substitution and competition. Since 2006, Germany follows an innovative approach by differentiating drug co-payments by the drug's price relative to its reference price. In this two-tier system, prescription drugs are completely exempted from co-payments if their prices undercut a certain price level relative to the reference price. We identify the effect of the policy on the prices of all affected prescription drugs and differentiate the analysis by firm types (innovative, generic, branded generic or importing firms). To identify a causal effect, we use a differences-in-differences approach and additionally exploit the fact that the exemption policy had been introduced successively in the different clusters. We use quarterly data from 2007 to 2010 and find empirical evidence for differentiated price setting strategies by firm types, ranging from price decreases of -13.1% (branded generics firms) to increases of +2.0% (innovators) following the introduction of potential reductions in co-payments. We refer to the latter result as the co-payment exemption paradox. Our competition proxy (no. of firms) suggests a significant but small negative correlation with prices.

153 citations

Journal ArticleDOI
TL;DR: In this paper, the authors compare two price-elicitation strategies: price generation and price selection, and show that consumers often prefer to select rather than to generate a price.

153 citations

Journal Article
TL;DR: McKinsey & Company's Michael Marn and Robert Rosiello show managers how to gain control of the pricing puzzle and capture untapped profit potential by using two basic concepts: the pocket price waterfall and thepocket price band.
Abstract: The fastest and most effective way for a company to realize maximum profit is to get its pricing right. The right price can boost profit faster than increasing volume will; the wrong price can shrink it just as quickly. Yet many otherwise tough-minded managers miss out on significant profits because they shy away from pricing decisions for fear that they will alienate their customers. Worse, if management isn't controlling its pricing policies, there's a good chance that the company's clients are manipulating them to their own advantage. McKinsey & Company's Michael Marn and Robert Rosiello show managers how to gain control of the pricing puzzle and capture untapped profit potential by using two basic concepts: the pocket price waterfall and the pocket price band. The pocket price waterfall reveals how price erodes between a company's invoice figure and the actual amount paid by the customer--the transaction price. It tracks the volume purchase discounts, early payment bonuses, and frequent customer incentives that squeeze a company's profits. The pocket price band plots the range of pocket prices over which any given unit volume of a single product sells. Wide price bands are commonplace: some manufacturers' transaction prices for a given product range 60%; one fastener supplier's price band ranged up to 500%. Managers who study their pocket price waterfalls and bands can identify unnecessary discounting at the transaction level, low-performance accounts, and misplaced marketing efforts. The problems, once identified, are typically easy and inexpensive to remedy.

152 citations

Journal ArticleDOI
TL;DR: In the absence of free entry, and both the medallions required of taxis and the seats of New York Stock Exchange members are fixed in number, the question arises: will any monopoly profit achieved by suppressing price competition be eliminated by non-price competition?.
Abstract: When a uniform price is imposed upon, or agreed to by, an industry, some or all of the other terms of sale are left unregulated. The setting of taximeter rates still allows competition in the quality of the automobile. The fixing of commission rates by the New York Stock Exchange still allows brokerage houses to compete in services such as providing investment information. If additional firms may enter such a price-regulated field at no cost disadvantage, profits resulting from the price regulation will be eliminated in long-run equilibrium. But in the absence of free entry-and both the medallions required of taxis and the seats of New York Stock Exchange members are fixed in number-the question arises: Will any monopoly profit achieved by suppressing price competition be eliminated by nonprice competition? We may emphasize that a symmetrical question arises if the firms are required to sell the same product (that is, have the same non-price variable) but are allowed to compete freely in prices. For example, let every seller of gasoline provide the identical product. Will free price competition eliminate any monopoly profits arising from agreement not to compete in the quality of gasoline? Economists generally attribute much more efficacy to price than to non-price competition without giving any clear explanation of the asymmetry of the two kinds of competition. Let us take advertising as the prototype of non-price variables. A previously competitive industry may form a cartel and (1) fix advertising jointly and allow competition in price or (2) fix price jointly and allow competition in advertising. We examine the two cases in turn. Let each firm be operating, under competition, at output Q0 and price P0 (Fig. 1). Upon colluding on advertising, marginal costs-which include the costs of advertising-are reduced at every output for each firm.1 The 1 Economists who find it uncomfortable to discuss advertising in a competitive industry can substitute another non-price variable (such as durability of product, investment advice, or warranties of free repairs) with only terminological effects.

151 citations


Network Information
Related Topics (5)
Incentive
41.5K papers, 1M citations
79% related
Empirical research
51.3K papers, 1.9M citations
79% related
Interest rate
47K papers, 1M citations
78% related
Volatility (finance)
38.2K papers, 979.1K citations
78% related
Productivity
86.9K papers, 1.8M citations
78% related
Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20238
202215
20217
202013
201922
201837