Strategic Obfuscation and Retail Pricing

Zohra Bouamra (), Timothy Richards, Gordon Klein, Céline Bonnet and Zohra Mechemache
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Zohra Bouamra: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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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; Search model; strategic obfuscation (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

Published in Review of Industrial Organization, 2020, 57 (4), pp.859-889. ⟨10.1007/s11151-019-09744-z⟩

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Related works:
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02902690

DOI: 10.1007/s11151-019-09744-z

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