Previous literature explains double couponing as a prisoner's dilemma in which supermarkets compete for larger customer shares by offering extra coupon discounts. In the second essay I view double couponing from the perspective of price discrimination. While upstream manufacturers earn profits from price discrimination, downstream retailers with market power have an incentive try to gain a share of these profits. I compare the retailer's double couponing (to double the face values of manufacturer coupons) with traditional retailer coupons. By committing to mark up the face values of manufacturer coupons by a fixed ratio, the retailer can steal the profits upstream manufacturers earned from price discrimination. Double couponing also eliminates the double price discrimination problem arising out of the non-cooperative coupon strategies between the upstream and downstream firms.other than efficiency-enhancing. In fact vertical restraints often serve anti- competitive purposes. For example, Salop and Scheffman (1983) show that a dominant firm can raise its rivalsa#39; costs and earn a profit if, in doing so, the dominant firma#39;sanbsp;...
|Title||:||Essays on Supermarket Pricing and Coupon Strategies|
|Publisher||:||ProQuest - 2007|