Price Dynamics of Swedish Pharmaceuticals

Aljoscha Janssen ()

No 1325, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper investigates price patterns of off-patent pharmaceuticals in Sweden. I show that price dynamics are dependent on the number of competitors in the market. The price patterns follow predictions from a model of dynamic price competition in which the demand for pharmaceuticals incorporates the known biases of consumers: habit persistence and brand preferences. Using the regulated market of Swedish pharmaceuticals, I show that price may help in identifying possible tacit collusion by manufacturers in markets where consumers experience behavioral frictions.

Keywords: Pharmaceutical pricing; Dynamic oligopoly; State dependence; Price cycles (search for similar items in EconPapers)
JEL-codes: D43 I11 L13 L40 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2020-03-18
New Economics Papers: this item is included in nep-com, nep-eur, nep-ind and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1325

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