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On-the-match price renegotiation: Evidence from Pakistan’s import data

Zara Liaqat, Karrar Hussain and Bilal M. Khan

Economics Letters, 2021, vol. 202, issue C

Abstract: Using matched importer–exporter transaction level trade data, this study offers evidence quantifying the extent of price dispersion within a foreign seller across importing firms in Pakistan. Furthermore, we examine the key mechanisms describing the pricing strategy of foreign sellers of narrowly defined product categories. We show that, within a given firm-to-firm network, importers tend to renegotiate prices on-the-match, resulting in prices to drop over time. Although these price adjustments do not differ substantially for differentiated products, foreign sellers of differentiated goods charge a significantly higher price to their newly acquired and one-shot buyers.

Keywords: Price discrimination; Transactional relationships; Firm-to-firm trade (search for similar items in EconPapers)
JEL-codes: F1 F14 L14 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.econlet.2021.109837

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