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box retailers that are branching out into the grocery business. Supermarket service levels can affect demand, costs, market power and, therefore, prices [1] . Therefore there are some opportunities for the food trade to provide competition among firms to enter the industry. (Supermarket pricing policy, Lopez).

 

In economic terms, it has been established that Australian supermarkets can be considered as an oligopoly. This is where a small number of firms control that market, however much like a monopoly where one company controls the market and in an oligopoly there are at least two main companies that control the market. In the Australian Food industry, the market leaders are without a doubt Cole’s group and Woolworth ltd. When there are, only a few sellers competing with each other in the Market place the actions of each one will have a greater impact on the profits of the others. There is no single model of oligopoly because there is no unique solution to the problem of strategic interaction; however, game theory more commonly known as prisoner’s dilemma can be used to capture the various outcomes of the supermarket pricing policy. The prisoner's dilemma is a fundamental problem in game theory that demonstrates why two people might not cooperate even if it is in both their best interests to do so. It was originally framed by Merrill Flood and Melvin Dresher. [2]

 

The equilibrium outcome of the game is that both companies will decrease their prices even though both would be better off if they keep their prices as they are. Such an outcome is unstable since each firm would have an incentive to advertise if its competitor did not. The Outcome that is most likely is called Nash equilibrium or the outcome at which neither firm has anything to gain by changing only its own strategy unilaterally.

 

Applying this theory, would indicated any possible evidence against the Supermarkets if either one were price discriminating against consumers in a given area.

 

This paper will investigate ‘ to what extent is the price of products in Australian supermarkets the determining factor in consumer’s choice to shop at a particular supermarket, and how can this knowledge be used to increase consumer numbers and revenue.

 

Recommendations will also be suggested after analyzing such information. For the purpose of this investigation, this paper will take an in depth look at local supermarkets in different communities with varying environmental factors.

 

Woolworth’s as A Company

 

Woolworths is an expanding company that has thousands of stores nation-wide, it is the second largest private employer in Australia. It has effectively removed the intermediary in the supply of products to its stores. It grows and produces its products and goods giving Woolworths com本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。