An empirical investigation of the welfare effects of banning wholesale price discrimination
2008
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Details
Title
An empirical investigation of the welfare effects of banning wholesale price discrimination
Keywords
Economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination: if downstream costs differences exist then discrimination shifts production inefficiently; towards high cost retailers; so a ban increases welfare; if differences in price elasticity of demand across retailers exist; discrimination may increase welfare if more market is covered; so a ban reduces welfare. Using retail prices and quantities of coffee brands sold by German retailers; I estimate a model of demand and supply and separate cost and demand differences. Simulating a ban on wholesale price discrimination has positive welfare effects in this market; and less if downstream cost differences shrink; or with less competition.
Author(s)
Villas-Boas, Sofia Berto
Subject(s)
Issue Date
Oct 01 2008
Publication Type
Working or Discussion Paper
DOI and Other Identifiers
10.22004/ag.econ.120491
Record Identifier
https://ageconsearch.umn.edu/record/120491
PURL Identifier
http://purl.umn.edu/120491
Total Pages
39
JEL Codes
L13
Note
3rd revision CUDARE Working Paper 1017R3 October 2008, 2nd revision CUDARE Working Paper 1017R2 August 2008, 1st revision CUDARE Working Paper 1017R February 2007, CUDARE Working Paper 1017 August 2006.
Series Statement
CUDARE Working Papers
1017R3
1017R3