Modelling Price Dispersion as an Outcome of Competition in the Irish Grocery Market

The paper empirically models price dispersion between related brands within product categories of the Irish Independent Grocery market. Retail brand prices are averaged over the independent shops stocking the brand. Since individual brands are retailed through different groups of shops, brands are p...

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Bibliographic Details
Published in:The Journal of industrial economics 1999-09, Vol.47 (3), p.325-343
Main Authors: Walsh, Patrick Paul, Whelan, Ciara
Format: Article
Language:English
Subjects:
Average prices
Brand names
Brands
Competition
Consumer economics
Consumer prices
Economic competition
Economic models
Grocery stores
Market competition
Market prices
Monopoly
Prices
Publishing industry
Regression analysis
Retail stores
Studies
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Summary:The paper empirically models price dispersion between related brands within product categories of the Irish Independent Grocery market. Retail brand prices are averaged over the independent shops stocking the brand. Since individual brands are retailed through different groups of shops, brands are priced over heterogeneous consumer segments. Brand price dispersion is estimated to increase with competition when conditioned on brand distribution structures, while controlling for other observed and unobserved deterministic factors. The data suggest that brand pricing across consumer groups induce varying degrees of localised price competition rather than pricing across segments to extract consumer willingness to pay.
ISSN:0022-1821
1467-6451
DOI:10.1111/1467-6451.00103