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Tyre price dispersion across retail outlets in the UK

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  • Juan Delgado
  • Michael Waterson

Abstract

We investigate price dispersion in a retail market (car tyres) characterised by outlets each selling a range of products, some of which are manufactured by their owners. Consumers face substantial price dispersion across outlets even for very tightly defined products. We show that this price dispersion has systematic components relating to retailer-manufacturer interactions. One specific result is that chains owned by manufacturers sell other manufacturers' tyres on average nearly 20% more expensively than do independent stores and over 11% more expensively than their own equivalent branded product. Copyright Blackwell Publishing Ltd. 2003.

Suggested Citation

  • Juan Delgado & Michael Waterson, 2003. "Tyre price dispersion across retail outlets in the UK," Journal of Industrial Economics, Wiley Blackwell, vol. 51(4), pages 491-509, December.
  • Handle: RePEc:bla:jindec:v:51:y:2003:i:4:p:491-509
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    Cited by:

    1. Mizgier, Kamil J. & Wagner, Stephan M. & Holyst, Janusz A., 2012. "Modeling defaults of companies in multi-stage supply chain networks," International Journal of Production Economics, Elsevier, vol. 135(1), pages 14-23.
    2. Jason Allen & Robert Clark & Jean-François Houde, 2014. "Price Dispersion in Mortgage Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 377-416, September.
    3. Simon Loertscher & Yves Schneider, 2011. "Chain Stores, Consumer Mobility, and Market Structure," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(2), pages 236-246, June.
    4. Michael Thompson & Steve Thompson, 2008. "Intra-industry differences in vertical integration, heterogeneous costs and pricing: the case of web hosting," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(5), pages 503-523, December.
    5. Moraga-González, José Luis & Wildenbeest, Matthijs R., 2008. "Maximum likelihood estimation of search costs," European Economic Review, Elsevier, vol. 52(5), pages 820-848, July.
    6. repec:spr:series:v:9:y:2018:i:1:d:10.1007_s13209-018-0172-6 is not listed on IDEAS

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