>> Really? So when you apply a varied set of pricing changes over time
>> across a chain of few hundred stores on an item or a set of items
>> throughout your chain and see how the sales of these and substitute
>> commodities respond, you aren't experimenting (among other things)?
>>
>
> I don't know enough about how they set the prices. If they
> just randomly assign different stores to have diff prices for
> the same item, you're right. Is that really what they do?
I don't know for certain, but if I were a retailer with enough size to run such experiments, I'd do it. Having that sort of knowledge to yourself is a mighty powerful competitive advantage, worth losing some money experimenting with sales. Prices at major chain retailers are adjusted daily, on a store-by-store basis--I assume a little of that variation is exploratory.
All the best,
John A