Multibrand Price Dispersion

Mark Armstrong and John Vickers

No 20973, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study a market in which firms each might supply a number of variants, or "brands", of fundamentally the same product. Consumers differ in the sets of brands they consider, and firms compete using (multi-dimensional) mixed pricing strategies. We show when firms apply uniform pricing across their brands, and when they use segmented pricing so that one "discount" brand is priced below another "premium" brand. We study the case of symmetric brands in particular, and discuss the impact of a firm introducing a new brand, of imposing a requirement to set uniform prices across brands, and of mergers between firms.

Keywords: Price; dispersion (search for similar items in EconPapers)
JEL-codes: C72 D43 D83 L13 M31 (search for similar items in EconPapers)
Date: 2025-12
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