Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305586 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11344
Publisher: 
CESifo GmbH, Munich
Abstract: 
Our study provides empirical insights into the extent to which differential market demographics and differential competition environments affect product prices. Using big data, we find that price variations are caused mainly by differential competitive environments. More specifically, we find that Brand Competition Within Stores exerts the largest downward pressure on prices. A 10 percent increase in the number of brands reduces prices by about 10 percent. Product Competition Within Stores exerts the second-largest price effect, followed by Store Competition Within Local Markets. Moreover, retailers operating multiple stores in a local market coordinate prices to attenuate competitive downward pressure on prices.
Subjects: 
anti-inflammatory drugs
competition
market determinants
price effects
pain killers
JEL: 
D40
D90
L10
L20
M20
Document Type: 
Working Paper
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