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How consumer information curtails market power in the funeral industry

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  • Thierry Blayac
  • Patrice Bougette
  • Christian Montet

Abstract

Based on the French market, the purpose of this article is to show that contrary to common opinion in France about the impossibility of having a deregulation of the business of funeral services without observing abuses of many locally dominant suppliers, improvement in consumer information, along with the entry of a special storing facility service (“chambre funéraire”), imposes enough competitive pressure on the various suppliers, especially the former monopolist. With a Discrete Choice Experiment implemented in Lyon, France, we find evidence that even in this very emotionally charged market, consumer behavior has changed in favor of a better assessment of the different possibilities of services supplied and of their relative prices (e.g., high price elasticities). We also implement simulations in local markets and show that with good consumer information the market power of supposedly dominant firms is far less important than generally believed. Lastly, simulations stress the procompetitive effects of any business setting up a new storing facility. Copyright Springer Science+Business Media, LLC 2014

Suggested Citation

  • Thierry Blayac & Patrice Bougette & Christian Montet, 2014. "How consumer information curtails market power in the funeral industry," European Journal of Law and Economics, Springer, vol. 37(3), pages 421-437, June.
    • Handle: RePEc:kap:ejlwec:v:37:y:2014:i:3:p:421-437
    DOI: 10.1007/s10657-012-9350-3
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    2. Lori Parcel, 2008. "Stiff Competition: Vertical Relationships in Cremation Services," Discussion Papers 07-041, Stanford Institute for Economic Policy Research.
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    Cited by:

    1. Blayac, Thierry & Bougette, Patrice, 2017. "Should I go by bus? The liberalization of the long-distance bus industry in France," Transport Policy, Elsevier, vol. 56(C), pages 50-62.

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    More about this item

    Keywords

    Funeral industry; Deregulation; Local competition; Market power; Discrete choice model; C25; D12; K23; L43;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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