Barter for price discrimination? A theory and evidence from Russia
AbstractUnprecedented demonetization of Russia’s transition economy has been explained by tight monetary policy, tax evasion and poor …nancial intermediation. We show that market power may also be important. We build a model of imperfect competition in which …rms use barter for price discrimination. The model predicts a positive relationship between concentration of market power and share of barter in sales. The model has multiple equilibria which may explain persistence of barter in Russia but not in other economies. Using a unique dataset on barter transactions in Russia, we show that the …rm-level evidence is consistent with the model’s predictions.
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Bibliographic InfoPaper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0007.
Length: 38 pages
Date of creation: Oct 2000
Date of revision:
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More information through EDIRC
barter; price discrimination; Cournot oligopoly;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- P42 - Economic Systems - - Other Economic Systems - - - Productive Enterprises; Factor and Product Markets; Prices
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