Price dynamics of Swedish pharmaceuticals

Aljoscha Janssen ()
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Aljoscha Janssen: Singapore Management University

Quantitative Marketing and Economics (QME), 2022, vol. 20, issue 4, No 1, 313-351

Abstract: Abstract This paper investigates price patterns of off-patent pharmaceuticals in Sweden. I show that price dynamics are dependent on the number of competitors in the market. The price patterns follow predictions from a model of dynamic price competition in which the demand for pharmaceuticals incorporates the known biases of consumers: habit persistence and brand preferences. Using the regulated market of Swedish pharmaceuticals, I show that price dynamics may help in identifying possible tacit collusion by manufacturers in markets where consumers experience behavioral frictions.

Keywords: Pharmaceutical pricing; Dynamic oligopoly; State dependence; Price cycles (search for similar items in EconPapers)
JEL-codes: D43 I11 L13 L40 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11129-022-09257-2

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