Replication data for: Zone Pricing in Retail Oligopoly

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Project Citation:

Adams, Brian, and Williams, Kevin R. Replication data for: Zone Pricing in Retail Oligopoly. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114369V1

Project Description

Summary: We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home-improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe's would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does.

Scope of Project

JEL Classification:
      D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
      L13 Oligopoly and Other Imperfect Markets
      L81 Retail and Wholesale Trade; e-Commerce
      M31 Marketing
      R32 Other Spatial Production and Pricing Analysis

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Published Versions

V1 [2019-10-12]

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DDI 2.5

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