Why do restaurants serve lunch cheaper than dinner?

Watanabe, Taiji (2015) Why do restaurants serve lunch cheaper than dinner? Journal of Revenue and Pricing Management, 14 (4). pp. 293-295. ISSN 1476-6930

Abstract

The article explores a question why restaurants serve lunch meals cheaper than dinner meals. Departing from traditional demand curves derived from utility functions, the article uses a distribution function of reservation prices of patrons to represent a market demand curve. Given identical convex market demand curves in two distinct markets isolated by the time, restaurants exploit the convexity of the market demand curves by setting two prices whose average price is higher than the competitive market equilibrium price. This exploitation opportunity induces restaurants to adopt oligopolistic pricing behaviours.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published version, in accordance with the copyright policy of the publisher.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 22 Apr 2016 02:14
Last Modified: 29 Jan 2018 05:46
Uncontrolled Keywords: restaurant pricing behaviour; oligopolistic pricing; exploitation of reservation prices; convex demand curve
Fields of Research : 14 Economics > 1401 Economic Theory > 140104 Microeconomic Theory
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970114 Expanding Knowledge in Economics
Identification Number or DOI: 10.1057/rpm.2015.25
URI: http://eprints.usq.edu.au/id/eprint/28407

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