PL EN


2007 | 18 | 3(187) | 67-84
Article title

PRICE DISCRIMINATION AND COUNTERTRADE

Selected contents from this journal
Title variants
Languages of publication
PL
Abstracts
EN
The aim of the paper is to examine the conditions in which companies use countertrade to hide their price discrimination practices and maintain a strong negotiating position with regard to their commercial partners. The analysis was made on the basis of two models. First, the authors present an innovative model for third-degree discrimination in which countertrade is used to conceal price differences; then they build a model in which countertrade promotes second-degree price discrimination. In the third-degree price discrimination model, the authors prove that the effective use of products as payment in countertrade deals, coupled with the relatively high probability that price discrimination will be revealed, encourages companies to diversify prices in different market segments with the use of tie-in transactions. On the other hand, in the second-degree price discrimination model, if the marginal costs of production are not too high in relation to the value of the mutual services, the monopoly will offer its customers the possibility of buying goods in an ordinary market transaction or in a tie-in. At a point of balance, both forms of trade will occur, but prices in countertrade will be lower than market prices. The authors show that, under specific conditions, countertrade is a useful tool for maximizing business profit by enabling price discrimination.
Year
Volume
18
Issue
Pages
67-84
Physical description
Document type
ARTICLE
Contributors
author
  • E. Baranowska-Prokop, Szkola Gl√≥wna Handlowa, Kolegium Gospodarki Swiatowej, al. Niepodleglosci 162, 02-554 Warszawa, Poland
References
Document Type
Publication order reference
Identifiers
CEJSH db identifier
07PLAAAA02324844
YADDA identifier
bwmeta1.element.29150c6a-265e-3621-b058-85c6b471d2e6
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