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WHY ARE BETTER SEATS “UNDERPRICED”?
Author(s) -
CHEUNG STEVEN N. S.
Publication year - 1977
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1977.tb01114.x
Subject(s) - economics
Faced with competition, one's behavior often depends on that of his competitors. The determination of price is one response to competition, and an important one indeed. But it is not the only one. All contracting parties may gain, if price can be reduced to encourage restraints on behavior. This paper shows that “behavior which restrains behavior” may be effectively induced by the simple expedient of a reduction in price.