Well according to an article I read recently it is. The article in question was about the hotel industry and was demonstrating that increased capacity through lower rates was actually earning less income than lower capacity at higher rates; i.e. keep rates the same of even raise them a bit!

 When the economy is weak, this seems counter productive, and it does depend on the industry in question. For example, brands like BMW or Mercedes add free goodies to the list price of some of their vehicles, a perk they can remove very easily, whereas if they lowered the price of their cars, it would erode their brand value and also destroy the second hand market for their cars. 

It’s a bit more difficult for Retailers of FMCG’s such as Tesco or even the local grocers; there, you do see price wars between the big players such as Tesco, Asda, Sainsburys, but eventually this can only go so far unless they start giving stuff away for free; two for one offers are good, but ultimately it’s about customer service and quality.