Abstract

Open Price Systems and Competition

The author shows, that under oligopolistic relations of competition, open price systems may interfere with the conditions of workable competition and have weakening effects on competition. They may have the same effects by turning polypolistic relations of competition into oligopolistic relations, depending on the strength of those relations. The design of an open price system has a gradual influence on these effects. When the possibilities of designing an open price system are considerably restricted by a combination of conditions, there may be considerably less weaking effects. Empirical research cannot help to verify these theseses, because of their limited evidence. This result should not lead to the conclusion, that open price systems necessarily exclude competition. In economic reality many constellations are possible to allow competition despite an open price system. However, open price systems do not increase the degree of competition. They may supply firms with information necessary for a rational decision making. But because they are collectively acquired, these informations result in a knowledge of interdependence among suppliers. This knowledge tends to damage the functions of competition in guiding and promboting efficiency