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Compact case
Authors: Matthias Hild
Published by: Darden Business Publishing
Originally published in: 2004
Version: 27 April 2016
Revision date: 13-May-2016
Length: 2 pages
Data source: Published sources

Abstract

The case is a continuation of Lesser Antilles Lines which describes the price competition between two duopolistic shipping companies facing inelastic demand for cargo volume. Customers have inelastic and time-sensitive demand, restricting their strategic possibilities. The fictional case introduces additional pricing instruments to this setup. The duopolists can now offer price guarantees and include most-favored-customer clauses and last-look provisions in their contracts. The case is linked to a web-based simulation exercise that lets students explore the effects of these contractual instruments in a duopoly.
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Abstract

The case is a continuation of Lesser Antilles Lines which describes the price competition between two duopolistic shipping companies facing inelastic demand for cargo volume. Customers have inelastic and time-sensitive demand, restricting their strategic possibilities. The fictional case introduces additional pricing instruments to this setup. The duopolists can now offer price guarantees and include most-favored-customer clauses and last-look provisions in their contracts. The case is linked to a web-based simulation exercise that lets students explore the effects of these contractual instruments in a duopoly.

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