EconPapers    
Economics at your fingertips  
 

Zone Pricing in Retail Oligopoly

Brian Adams and Kevin R. Williams

American Economic Journal: Microeconomics, 2019, vol. 11, issue 1, 124-56

Abstract: We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home-improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe's would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does.

JEL-codes: D43 L13 L81 M31 R32 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/mic.20170130
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mic.20170130 (application/pdf)
https://www.aeaweb.org/content/file?id=8803 (application/zip)
https://www.aeaweb.org/articles/attachments?retrie ... szNPMMHUgdC3XRByy-Gv (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Zone Pricing in Retail Oligopoly (2017) Downloads
Working Paper: Zone Pricing in Retail Oligopoly (2017) Downloads
Working Paper: Zone Pricing in Retail Oligopoly (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmic:v:11:y:2019:i:1:p:124-56

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2019-05-19
Handle: RePEc:aea:aejmic:v:11:y:2019:i:1:p:124-56