Strategic Obfuscation and Retail Pricing

Timothy J. Richards (), Gordon Klein, Céline Bonnet and Zohra Mechemache
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Timothy J. Richards: Arizona State University

Review of Industrial Organization, 2020, vol. 57, issue 4, No 7, 859-889

Abstract: Abstract Consumer-product manufacturers—and retailers that sell their products—often sell slightly differentiated items for reasons other than appealing to heterogeneous tastes—different sizes of a popular brand, or different flavors in a common product line for instance. We argue that this practice is a form of strategic obfuscation, which is intended to make price-comparison more difficult, and thereby raise margins on non-comparable products. We test our hypothesis with the use of examples from consumer-packaged good categories in German and French retail scanner data. We find that—after controlling for other explanations for how margins can vary with package size and type—we cannot rule out strategic obfuscation as a feature of our retail sales data.

Keywords: Differentiation; Price discrimination; Retail pricing; Strategic obfuscation (search for similar items in EconPapers)
JEL-codes: D43 L13 M31 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Strategic Obfuscation and Retail Pricing (2020)
Working Paper: Strategic Obfuscation and Retail Pricing (2017)
Working Paper: Strategic Obfuscation and Retail Pricing (2016)
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DOI: 10.1007/s11151-019-09744-z

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