Parallel pricing
Parallel pricing refers to the practice of setting similar prices for products or services that are essentially the same, regardless of the brand or retailer. This can occur when competing companies agree to maintain consistent pricing to avoid price wars and maintain profit margins.
For example, in the electronics industry, different retailers may sell the same model of a smartphone at the same price to prevent undercutting and maintain a healthy competition. This can also happen with generic products like household items or groceries, where different brands may offer similar products at similar prices.
While parallel pricing can benefit companies by stabilizing prices and ensuring fair competition, it can also limit consumer choice and lead to higher prices overall. Additionally, it can raise antitrust concerns if companies collude to fix prices rather than compete on the merits of their products.
Overall, parallel pricing is a complex issue that requires careful consideration of both consumer interests and market competition to ensure a fair and competitive marketplace.
- Benefits: Stabilizes prices, prevents price wars
- Drawbacks: Limits consumer choice, raises antitrust concerns
For more information, you can visit Wikipedia’s article on price fixing.