Price Discrimination and Customer Behaviour: Empirical Evidence from Marseille
AbstractWe analyse the interaction between a seller and customers in a shop on the fruits and vegetables wholesale market in Marseille using an unique data set. We find that customers' bargaining activity is correlated with the kind and location of the business. To determine how the interactions between the seller and the customers influence prices, we compare the price each customer pays for a given good with the daily average price. We find that a customer of the shop is more likely to pay a price higher than other customers for the same good if---ceteris paribus---the customer is unknown to the shop assistants, buys only a small quantity, or buys goods sold on commission. If the customer is known to the shop assistants, then loyalty and bargaining make it more likely that the customer gets better than average price.
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Date of creation: 22 Dec 2008
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Face-to-face bargaining ; customer loyalty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-CBE-2009-01-03 (Cognitive & Behavioural Economics)
- NEP-MKT-2009-01-03 (Marketing)
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- Beckert, Jens, 2011. "Where do prices come from? Sociological approaches to price formation," MPIfG Discussion Paper 11/3, Max Planck Institute for the Study of Societies.
- Joshua Sherman & Avi Weiss, 2012. "Price Response, Asymmetric Information, and Competition," Working Papers 2012-13, Department of Economics, Bar-Ilan University.
- Sylvain Mignot & Gabriele Tedeschi & Annick Vignes, 2012. "An Agent Based Model of Switching: The Case of Boulogne S/mer Fish Market," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 15(2), pages 3.
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