price war

noun

Definition of price war

: commercial competition characterized by the repeated cutting of prices below those of competitors

Examples of price war in a Sentence

The airlines are engaged in another price war.
Recent Examples on the Web The volunteer has to decide whether to engage in a price war with the more powerful competitor while an organizer charts the volunteer’s dire financial situation on butcher paper. David Mccabe, New York Times, "America’s Top Foundations Bankroll Attack on Big Tech," 10 Dec. 2019 Schwab’s move is the latest in an escalating price war with competitors as investors flock to the cheapest products. Washington Post, "UPS gets FAA approval for drone airline; Schwab to end online commissions," 1 Oct. 2019 Many firms that invest in the public markets have faced heightened pressure lately as a price war between managers is pulling the fees of the most commonly offered stock and bond strategies near zero. Dawn Lim, WSJ, "Indexing Giant Vanguard Examines a Push Into Private Equity," 23 June 2019 Now Alibaba’s Singles’ Day has kicked off a price war. Shuli Ren | Bloomberg, Washington Post, "Jack Ma Is Ripping Up a $12 Trillion Stock Market," 14 Nov. 2019 One more headache: A sudden price war has seen every major online broker eliminate commission fees on stock and ETF trades. Charles Riley, CNN, "The big bank winning streak might be about to end," 13 Oct. 2019 Investors hammered shares of online brokers this month after Charles Schwab escalated the industry’s ongoing price war by scrapping more of its trading fees, all to the benefit of regular investors. Damian J. Troise, chicagotribune.com, "Fidelity drops trading fees as investing moves to ‘zero commissions’ model," 10 Oct. 2019 Its low costs spurred a price war that forced incumbents like Airtel and Vodafone-Idea (now merged) to majorly slash prices. Ananya Bhattacharya, Quartz India, "Dear customers, Jio’s fight isn’t with you. It’s with India’s telecom regulator," 14 Oct. 2019 Allowing new firms to operate means more competition, which may eventually lead to a price war. Washington Post, "Why Asia’s Banking Hubs Are Making Virtual a Reality," 23 Sep. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'price war.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of price war

1895, in the meaning defined above

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Time Traveler for price war

Time Traveler

The first known use of price war was in 1895

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Statistics for price war

Last Updated

20 Jan 2020

Cite this Entry

“Price war.” The Merriam-Webster.com Dictionary, Merriam-Webster Inc., https://www.merriam-webster.com/dictionary/price%20war. Accessed 22 January 2020.

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More Definitions for price war

price war

noun

Financial Definition of price war

What It Is

A price war is an event whereby two or more companies continually lower prices to undercut each other.

How It Works

Airline companies are famous for their price wars. If Airline XYZ cuts the price of a flight from Los Angeles to New York from $800 to $700, Airline ABC, which is competing for business on that route, might cut its fare to $650. Airline XYZ might respond by lowering its fair to $625, and so on.

Why It Matters

Engaging in a price war is a competitive strategy, usually to capture market share. Falling prices tend to attract more customers. Some companies may choose to sell a product or service at a loss, however, in order to capture market share and outwin competitors. In some cases, this might lead to antitrust violations.

Source: Investing Answers

price war

noun

English Language Learners Definition of price war

: a situation in which companies or stores compete with each other by lowering their prices on goods or services in order to attract more customers

Comments on price war

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