Differentiation and the relationship between product market competition and price discrimination

Manuel Becerra () and Juan Santaló ()
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Manuel Becerra: Instituto de Empresa
Juan Santaló: Instituto de Empresa
Authors registered in the RePEc Author Service: Juan Santalo

Working Papers Economia from Instituto de Empresa, Area of Economic Environment

Abstract: We investigate how the effect of competition on price discrimination varies depending on the level of quality provided by companies in the hospitality industry. Our findings reconcile conflicting results of previous literature on this topic. Namely, we provide strong empirical evidence that competition affects differently the price of single and double rooms of hotels with greater quality versus those with lower quality. In the presence (absence) of differentiation, competition increases (decreases) price discrimination. Our findings are robust to the use of econometric techniques that alleviate endogeneity concerns.

Pages: 26 pages
Date: 2011-09
New Economics Papers: this item is included in nep-bec, nep-com, nep-mkt and nep-tur
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Persistent link: https://EconPapers.repec.org/RePEc:emp:wpaper:de8-138-i

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