Journal ArticleDOI
Competition and Price Discrimination in Yellow Pages Advertising
Meghan R. Busse,Marc Rysman +1 more
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TLDR
The authors examined the effect of competition on second degree price discrimination in display advertising in Yellow Page directories and found that competition increases the curvature of the price schedule, meaning that purchasers of the largest ads see their prices fall the most in response to competition.Abstract:
This paper examines the effect of competition on second degree price discrimination in display advertising in Yellow Page directories. Recent theoretical work makes conflicting predictions about the effect of competition on curvature. Our main empirical finding is that competition increases the curvature of the price schedule, meaning that purchasers of the largest ads see their prices fall the most in response to competition. We also present evidence of menu costs in adjusting pricing schedules and address this issue in estimation. The magnitudes that we find could be relevant for welfare calculations in the face of price discrimination.read more
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Book ChapterDOI
Chapter 34 Price Discrimination and Competition
TL;DR: In this article, the developments in price discrimination theory as it applies to imperfectly competitive markets are surveyed in the areas of first-, second-and third-degree price discrimination, pricing under demand uncertainty, bundling and behavior-based discrimination.
Journal ArticleDOI
Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry
TL;DR: In this paper, the authors analyzed the effects of competition on price dispersion in the airline industry, using panel data from 1993:Q1 through 2006:Q3, and found that competition has a negative effect on price discrimination in line with the textbook treatment of price discrimination.
Journal ArticleDOI
Do Mergers Improve Information? Evidence from the Loan Market
TL;DR: The authors examine the informational effects of M&As by investigating whether bank mergers improve banks' ability to screen borrowers, and find evidence of these informational improvements by exploiting a dataset in which they observe a measure of a borrower's default risk that the lenders observe only imperfectly.
Posted Content
The media and advertising: a table of two-sided markets
TL;DR: The authors of as mentioned in this paper pointed out that advertisers' demand to reach prospective customers is a strong predictor of program diversity and quality, and pointed out possible market failures in program duplication and catering to the Lowest Common Denominator, indicating lack of cultural diversity.
Journal ArticleDOI
Nonlinear pricing in an oligopoly market: the case of specialty coffee
TL;DR: In this paper, a structural utility model was proposed to compute consumers' benefits from changing products' sizes, and then compared the estimated benefits to cost data, showing that design distortions are relatively large for products not targeted to the highest demand consumers.
References
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Book
The Theory of Industrial Organization
TL;DR: The Theory of Industrial Organization as discussed by the authors is the first primary text to treat the new industrial organization at the advanced-undergraduate and graduate level Rigorously analytical and filled with exercises coded to indicate level of difficulty, it provides a unified and modern treatment of the field with accessible models that are simplified to highlight robust economic ideas.
Hubs and high fares: dominance and market power in the u.s. airline industry
TL;DR: In this article, the authors examined the importance of route and airport dominance in determining the degree of market power exercised by an airline and found that an airline's share of passengers on a route and at the endpoint airports significantly influences its ability to mark price above cost.
Journal ArticleDOI
Nonlinear Pricing with Random Participation
Jean-Charles Rochet,Lars Stole +1 more
TL;DR: In this article, the authors develop a multidimensional methodology for addressing this class of problems, providing two important applications to nonlinear pricing, and they show that the duopoly outcome is qualitatively similar to the monopoly outcome when marginal costs are symmetric and competition is sufficiently intense.
Journal ArticleDOI
Price Discrimination and Retail Configuration
TL;DR: In this paper, the hypothesis that price discrimination based on willingness to pay for quality can occur in multifirm markets is confirmed using micro-data on gasoline retailing and a test that discriminates between price structures associated with discrimination and with cost-driven, competitive differentials is developed and implemented with controls for variation in outlet and market characteristics.
Journal ArticleDOI
Selling Costs and Switching Costs: Explaining Retail Gasoline Margins
TL;DR: In this paper, a number of cost-based explanations for such gasoline pricing, as well as the possibility of price discrimination were studied, and it was shown that gas stations discriminate against groups of customers who are less likely to switch to another station.
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