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Recent theoretical work has shown that the incentive to target rival firms' customers with low prices can increase price discrimination, and that the strength of the incentive depends on a firm's market position. Using data on Swedish newspaper subscriptions, we find strong support for these predictions. Newspapers with a local competitor sell a larger part of their circulation at a discount than monopoly newspapers. Moreover, in competitive markets, the use of discounts is inversely related to the newspaper's market share. We find no evidence that price discrimination based on observable and exogenous characteristics is influenced by the market structure. Copyright 2008 The Authors. Journal compilation 2008 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

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  • Marcus Asplund & Rickard Eriksson & Niklas Strand, 2008. "PRICE DISCRIMINATION IN OLIGOPOLY: EVIDENCE FROM REGIONAL NEWSPAPERS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 333-346, June.
  • Handle: RePEc:bla:jindec:v:56:y:2008:i:2:p:333-346

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    References listed on IDEAS

    1. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    2. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Gabriel Garber & Márcio Issao Nakane, 2015. "The Break of Brand Exclusivity in Brazilian Credit Card Acquiring: effects and markup-cost decomposition in a price dispersion setting," Working Papers Series 390, Central Bank of Brazil, Research Department.
    2. Amarjyoti Mahanta, 2016. "Contemporaneous Most-Favoured-Customer Pricing Policy vs. Price Discrimination in a Differentiated Product Duopoly Market," Economics Bulletin, AccessEcon, vol. 36(1), pages 75-83.
    3. Takanori Adachi & Noriaki Matsushima, 2014. "The Welfare Effects Of Third-Degree Price Discrimination In A Differentiated Oligopoly," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1231-1244, July.
    4. Marc Möller & Makoto Watanabe, 2016. "Competition in the presence of individual demand uncertainty," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 273-292, May.
    5. repec:bla:ecinqu:v:55:y:2017:i:1:p:339-351 is not listed on IDEAS
    6. Alessandro Acquisti & Curtis Taylor & Liad Wagman, 2016. "The Economics of Privacy," Journal of Economic Literature, American Economic Association, vol. 54(2), pages 442-492, June.
    7. Charles Angelucci & Julia Cage, 2015. "Newspapers in Times of Low Advertising Revenues," Sciences Po publications info:hdl:2441/26t617gatp8, Sciences Po.
    8. Marco Alderighi & Alessandro Cento & Peter Nijkamp & Piet Rietveld, 2011. "Second-degree Price Discrimination and Inter-group Effects in Airline Routes between European Cities," Tinbergen Institute Discussion Papers 11-118/3, Tinbergen Institute.
    9. Sascha Sardadvar, 2014. "A model of price-setting in regional duopolies based on consumer loyalty: theory and evidence from the Austrian newspaper industry," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 591-616, September.
    10. Brokesova, Zuzana & Deck, Cary & Peliova, Jana, 2014. "Experimenting with purchase history based price discrimination," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 229-237.
    11. Zuzana Brokesova & Cary Deck & Jana Peliova, 2014. "Experimenting with Behavior Based Pricing," Working Papers 14-12, Chapman University, Economic Science Institute.

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