Zone Pricing in Retail Oligopoly

• 成果类型: Article
• 署名作者: Adams, Brian; Williams, Kevin R.
• 署名单位: United States Department of Labor; Yale University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20170130
• 发表日期: 2019
• 页码: 124-156
• 关键词: MARKET POWER; DISCRIMINATION; CHOICE; COMPETITION; managerial; welfare; online; models; COSTS

摘要

We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home-improvement industry, we find that Home Depot would benefit from, finer pricing hut that Lowe's would prefer coarser pricing, Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does.