Price Leadership and Discrimination in the European Car Market
AbstractThis paper explains differences in the price of the same good in different markets. In the authors' model, n producers each play the role of Stackelberg leader on their own market and there is one market with no domestic producer. The authors show that, even without demand differences between markets, pretax prices will be higher on markets where there are high-cost domestic producers and where taxes are low. Evidence from the European car market, based on time series for individual models, supports these results. Furthermore, as the model suggests, exchange rate changes are not passed through to car prices. Copyright 1990 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Industrial Economics.
Volume (Year): 39 (1990)
Issue (Month): 1 (September)
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- Kirman, A.P. & Schueller, N., 1990. "Price Leadership And Discrimination In The European Car Market," G.R.E.Q.A.M. 90b02, Universite Aix-Marseille III.
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- Hens, Thorsten & Jager, Eckart & Kirman, Alan & Phlips, Louis, 1999. "Exchange rates and oligopoly," European Economic Review, Elsevier, vol. 43(3), pages 621-648, March.
- Jan Boone & Delia Ionascu & Kresimir Zigic, 2006. "Trade Policy, Market Leaders and Endogenous Competition Intensity," CERGE-EI Working Papers wp311, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
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- Eyal Dvir & Georg H. Strasser, 2013. "Does Marketing Widen Borders? Cross-Country Price Dispersion in the European Car Market," Boston College Working Papers in Economics 831, Boston College Department of Economics, revised 04 Apr 2014.
- Yves Bourdet, 1991. "Pricing policy and quality upgrading in the Swedish car market: Do import surveillance and exchange rate instability matter?," Open Economies Review, Springer, vol. 2(3), pages 255-274, October.
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- Guillaume Gaulier & Séverine Haller, 2000. "The Convergence of Automobile Prices in the European Union: an Empirical Analysis for the Period 1993-1999," Working Papers 2000-14, CEPII research center.
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