 Barriers to Retail Competition and Prices: Evidence From SpainNo 2006/231, IMF Working Papers from International Monetary Fund Abstract: Why do prices in Spain's regions fail to converge? The prime suspects for this puzzling result are differences in regional barriers to entry in retail distribution. This paper develops a Cournot-Nash model of imperfect competition to illustrate the effect of barriers on prices. A unique data set-derived from an extensive analysis of competition policies in Spain- provides evidence that barriers to entry increase regional prices. The evidence also suggests that, consistent with the model's predictions, barriers to entry raise prices up to a point, and thus indicate that barriers have a threshold effect on prices. Keywords: WP; average cost; Barriers to entry; Cournot-Nash model; regulation in goods markets; and panel cointegration; firm type; th firm; profit-maximizing firms result; low-cost firm; firm's problem; firms' output; incumbent firm; Inflation; Competition; Threshold analysis; Consumer price indexes; Europe (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2006/231 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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