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7 septembre 2023
- handle: 10670/1.0hivzn
- hal: hal-04217013
Sujets proches
Commercial products--Prices Commodity prices Price theory Justum pretium Price policy, Industrial Retail pricing Price policyCiter ce document
Philippe Mahenc, « Price Dynamics for Credence Products: Penetration and Skimming Strategies », HAL-SHS : économie et finance, ID : 10670/1.0hivzn
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Résumé
This paper investigates a dynamic model of price signaling for a credence product of unknown social performance. A new entrant uses prices to reveal social responsibility and uphold reputability throughout a veri cation phase. In equilibrium, the signaling strategy involves penetration or skimming pricing depending on the competitive pressure faced by the entrant. Confronted with competition from conventional incumbents, the socially responsible entrant repeatedly charges low prices to penetrate the market. By contrast, in an untapped market, the socially responsible entrant repeatedly charges high prices to skim the cream o⁄ the top of the demand. In both cases, costly signaling is consistent with Veblen s law that conspicuous waste is an e⁄ective signal of reputability.