Price war

[3] Heil and Helsen (2001) proposed that a price war exists only if one or more of a set of qualitative conditions are satisfied.

Price wars often begin when simple promotional activities are misunderstood as major strategic changes.

In the long run, price wars can cause companies to incur losses in their margins, customer equity, innovation capabilities and competitive advantage.

However, in the long run, consumers are likely to form unrealistic reference prices and may be faced with lower quality products.

[13][2] Price wars are prevalent in many industries,[2] with academic literature citing cases in market segments, including: electricity,[14] telecommunications,[15] automotive,[16] and airlines.