An empirical investigation of the welfare effects of banning wholesale price discrimination

Sofia Berto Villas‐Boas
Authors registered in the RePEc Author Service: Sofia Villas-Boas

RAND Journal of Economics, 2009, vol. 40, issue 1, 20-46

Abstract: Economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination: if downstream cost differences exist, then discrimination shifts production inefficiently, toward high‐cost retailers, so a ban increases welfare; if differences in price elasticity of demand across retailers exist, discrimination may increase welfare if quantity sold increases, so a ban reduces welfare. Using retail prices and quantities of coffee brands sold by German retailers, I estimate a model of demand and supply and separate cost and demand differences. Simulating a ban on wholesale price discrimination has positive welfare effects in this market, and less if downstream cost differences shrink, or with less competition.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
https://doi.org/10.1111/j.1756-2171.2008.00054.x

Related works:
Working Paper: An Empirical Investigation of the Welfare Effects of Banning Wholesale Price Discrimination (2009)
Working Paper: An empirical investigation of the welfare effects of banning wholesale price discrimination (2008)
Working Paper: An Empirical Investigation of the Welfare Effects of Banning Wholesale Price Discrimination (2008)
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:bla:randje:v:40:y:2009:i:1:p:20-46

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0741-6261

Access Statistics for this article

RAND Journal of Economics is currently edited by James Hosek

More articles in RAND Journal of Economics from RAND Corporation Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().