Price Transparency, Media, and Informative Advertising

Itai Ater and Oren Rigbi

American Economic Journal: Microeconomics, 2023, vol. 15, issue 1, 1-29

Abstract: We study the effects of a price transparency regulation in Israeli supermarkets. Using price data collected before and after the regulation and a difference-in-difference research design, we show that price levels and price dispersion declined significantly after the regulation. Chains also began setting identical prices in all stores. We use Robert and Stahl (1993) to interpret our findings, showing that low-priced chains extensively used price advertising after prices became transparent. These chains referenced price-comparison surveys conducted by the media to induce credibility for ads. Our findings highlight the importance of price transparency and the procompetitive role of informative advertising.

JEL-codes: D22 D83 L11 L81 L82 L88 M37 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mic.20200337 (application/pdf)
https://www.aeaweb.org/doi/10.1257/mic.20200337.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/mic.20200337.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
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:15:y:2023:i:1:p:1-29

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

DOI: 10.1257/mic.20200337

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 ().