PRICE DISCRIMINATION IN OLIGOPOLY: EVIDENCE FROM REGIONAL NEWSPAPERS*

Marcus Asplund, Rickard Eriksson () and Niklas Strand

Journal of Industrial Economics, 2008, vol. 56, issue 2, 333-346

Abstract: Recent theoretical work has shown that the incentive to target rival firms' customers with low prices can increase price discrimination, and that the strength of the incentive depends on a firm's market position. Using data on Swedish newspaper subscriptions, we find strong support for these predictions. Newspapers with a local competitor sell a larger part of their circulation at a discount than monopoly newspapers. Moreover, in competitive markets, the use of discounts is inversely related to the newspaper's market share. We find no evidence that price discrimination based on observable and exogenous characteristics is influenced by the market structure.

Date: 2008
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