Authors
Pokatovich E.
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Degree
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PhD in Economy, Associate Professor National Research University Higher School of Economics |
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E-mail
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epokatovich@hse.ru |
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Location
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Moscow |
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Articles
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Cournot competition vs. Bertrand competition: the choice of a strategic variable. The case of Russian automobile marketThe paper analyzes oligopolistic competition in a market for a differentiated product. A comparative
analysis of competition models by Cournot (output competition) and Bertrand (price competition)
under prerequisites put forward by the authors shows that under Bertrand competition the price
level will be lower. Whereas interrelation between firms output and profit is ambiguous (if goods
produced are substitutes), and depend, other things being equal, on the attractiveness of the good
offered by the firm.
The results obtained are illustrated using Russia’s automotive market review. In particular, an attempt
is made to classify some decisions made by car producers as the one or the other competition
strategy analyzed in the theoretical part of the paper.
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Product line and price discrimination: a theory perspective and a view from the marketsThe paper is focused on nonlinear pricing, price discrimination and their implementation in actual
markets. The introductory section uses simple examples to describe the basic notions and types of
price discrimination. Section 2 reviews the main theories behind nonlinear pricing and summarizes
the existing results with a focus on consumer choice for those consumers who are keen on quality.
It allows the authors in Section 3 to move further to analyze the issues of «prestige» and conspicuous
consumption, especially in the case when the sellers exercise their market power over buyers
through brands and reputation. Section 4 shows how theoretical results are actually implemented
in the automobile market. In particular, the paper shows that cars originating from countries with an
established reputation as automobile manufacturers (UK, Germany, Sweden) get the highest markup
in the market compared to the basic case. Moreover, the analysis of practical methods used in
the Russian car market confirms that car dealers manage to sell automobiles as close to consumer
reserve prices as possible, employing all types of price discrimination.
Read more...
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