Price Discrimination and Bargaining: Empirical Evidence from Medical Devices

Matthew Grennan

American Economic Review, 2013, vol. 103, issue 1, 145-77

Abstract: Many important issues in business-to-business markets involve price discrimination and negotiated prices, situations where theoretical predictions are ambiguous. This paper uses new panel data on buyer-supplier transfers and a structural model to empirically analyze bargaining and price discrimination in a medical device market. While many phenomena that restrict different prices to different buyers are suggested as ways to decrease hospital costs (e.g., mergers, group purchasing organizations, and transparency), I find that: (i) more uniform pricing works against hospitals by softening competition; and (ii) results depend ultimately on a previously unexplored bargaining effect. (JEL C78, L13, L14, L64)

JEL-codes: C78 L13 L14 L64 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.1.145
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Citations: View citations in EconPapers (183)

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