Price discrimination or uniform pricing: Which colludes more?

Niklas Horstmann and Jan Krämer
Authors registered in the RePEc Author Service: Jan Krämer ()

Economics Letters, 2013, vol. 120, issue 3, 379-383

Abstract: Conventional wisdom attributes different economic outcomes of uniform pricing and price discrimination to the heterogeneity in market conditions or market participants, such as differences in demand elasticity or production costs. We offer a new explanation for the observed differences that relates to behavioral aspects rather than demand- or supply-side effects. In particular, in a symmetric Bertrand duopoly laboratory experiment, for which theory predicts no differences between the two pricing regimes, we find that tacit price collusion is systematically higher under price discrimination than under uniform pricing.

Keywords: Price discrimination; Uniform pricing; Multimarket contact; Experimental economics; Collusion (search for similar items in EconPapers)
JEL-codes: C92 L13 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:3:p:379-383

DOI: 10.1016/j.econlet.2013.05.011

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