Saturday, February 03, 2007

Works Cited

A firm whose behavior was consistent with a myopic pricing strategy [a strategy involving maximizing current profit even if it results in strengthening competitors in the long run] was the Reynolds International Pen Corporation. Reynolds was one of the inventors of the ballpoint pen. Starting in 1945, it sold its ballpoint pen for between $12 and $20, while unit cost was only 80 cents. In response to this high price, a hundred competitors rushed into the market. By 1948, Reynold's market share was zero! However, it made off with considerable profits over that three-year period.

W. Kip Viscusi, et al Economics of Regulation and Antitrust

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