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Price war is "commercial competition characterized by the repeated cutting of prices below those of competitors".wikipedia
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However, it can be difficult to prove that prices dropped because of deliberate predatory pricing, rather than legitimate price competition.
In oligopoly markets prices can become 'sticky' because if the price rises, competitors will not follow the rise.
However, even a large price decrease will gain only a few customers because such an action will begin a price war with other firms.
commoditiescommodity pricescommodity good
playerplayersplayers'' of the game
economy of scalescaleeconomics of scale
One competitor will lower its price, then others will lower their prices to match.
status quo antecommon standarddoesn't fundamentally alter
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But if the price falls, other players will merchants will follow suit if they can.
monopolistically competitivemonopolisticmonopolistic competitors
price comparisonPriceprice determination
Plus/4Plus 4Commodore 264
In the early 1980s, Commodore found itself engaged in a price war in the home computer market.
Sega DreamcastDCDreamcast Microphone
Sony's success was further aided by a price war in which Sega lowered the price of the Saturn from $399 to $299 and then from $299 to $199 in order to match the price of the PlayStation–even though Saturn hardware was more expensive to manufacture and the PlayStation enjoyed a larger software library.