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Title: PRICE WARS: THE COST OF A COMPETITIVE BEHAVIOUR

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Subject: Business
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Date: July 31, 2002
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Length: 7 / 1914
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426). Likewise, it is maintained that such warfare is a period in which the firms set prices that are significantly below the prices commonly charged in the industry (Busse, 2000). According to Slade (1989) price wars entail that one competitor cuts price to punish another competitor for violating a rule of competitive conduct...

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Consequently, the firm to be punished reacts through another price cut, prompting further such cuts by the competitor, and so on. Thomas and Soldow (1988) state that if a price cut violates industry rules, competitive turmoil may result. Price War as a Competitive Behaviour As stated in the previous section, price wars are a competitive behaviour...

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