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Price discrimination in grocery trade: evidence from Italy

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  • Monica Giulietti

Abstract

This paper investigates the determinants of price dispersion between staple and non-staple goods in grocery retailing, as the result of pricing decisions by multiproduct firms. Theoretical predictions about the nature of supermarkets' pricing behaviour are compared and tested empirically using disaggregated data from the Italian grocery trade over the period 1990 - 1992. The empirical results provide evidence for the existence, in all types of retail organization, of the form of price discrimination suggested by Bliss particularly for specialist shops. The results are consistent with discrimination due to the exploitation of consumers' switching costs.

Suggested Citation

  • Monica Giulietti, 1999. "Price discrimination in grocery trade: evidence from Italy," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 319-329.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:3:p:319-329
    DOI: 10.1080/000368499324309
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    Cited by:

    1. Asplund, Marcus & Eriksson, Rickard & Strand, Niklas, 2001. "Price Discrimination in Oligopoly: Evidence from Swedish Newspapers," SSE/EFI Working Paper Series in Economics and Finance 468, Stockholm School of Economics, revised 01 Jan 2007.
    2. T. Randolph Beard & Michael L. Stern, 2008. "Continuous Cross Subsidies And Quantity Restrictions," Journal of Industrial Economics, Wiley Blackwell, vol. 56(4), pages 840-861, December.

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