On-the-match price renegotiation: Evidence from Pakistan’s import data
Karrar Hussain and
Bilal M. Khan
Economics Letters, 2021, vol. 202, issue C
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)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:202:y:2021:i:c:s0165176521001142
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