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The influence of consumer price information on retail pricing and consumer behavior

Author

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  • Grant Devine
  • Bruce Marion

Abstract

Comparative price information for major Ottawa supermarkets was collected over a twenty-eight-week period and published in daily newspapers during a five-week test period. In response to the information, the dispersion of prices across store and chains narrowed, the average level of prices of the market dropped, and consumer satisfaction increased relative to the control market. Consumers transferred patronage to the lower priced stores. Consumers indicated a willingness to pay US$ .34 per week on average for the price comparison information. Estimated consumer benefits far exceeded the cost of the program.

Suggested Citation

  • Grant Devine & Bruce Marion, 1979. "The influence of consumer price information on retail pricing and consumer behavior," Framed Field Experiments 00138, The Field Experiments Website.
  • Handle: RePEc:feb:framed:00138
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    Cited by:

    1. Joel Waldfogel & Jeffrey Milyo, 1999. "The Effect of Price Advertising on Prices: Evidence in the Wake of 44 Liquormart," American Economic Review, American Economic Association, vol. 89(5), pages 1081-1096, December.
    2. Agrawal, Jagdish & Grimm, Pamela E. & Srinivasan, Narasimhan, 1994. "Quantity Surcharges on Groceries," Research Reports 25179, University of Connecticut, Food Marketing Policy Center.
    3. David Genesove & Avi Simhon, 2015. "Seasonality and the Effect of Advertising on Price," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 199-222, March.
    4. Anania, Giovanni & Nisticò, Rosanna, 2014. "Price dispersion and seller heterogeneity in retail food markets," Food Policy, Elsevier, vol. 44(C), pages 190-201.
    5. Christy, Ralph D., 1994. "Private Strategies and Public Policies: The Economics of Information and the Economic Organization of Markets," Staff Papers 121314, Cornell University, Department of Applied Economics and Management.
    6. Ian M. McDonald, 1984. "Trying to Understand Stagflation," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 17(3), pages 32-56.
    7. Carlton, Dennis W. & Perloff, Jeffrey M., 1989. "The Economics of Information," Research Reports 25156, University of Connecticut, Food Marketing Policy Center.
    8. Giovanni Mastrobuoni, 2004. "The Effects of the Euro-Conversion on Prices and Price Perceptions," Working Papers 101, Princeton University, Department of Economics, Center for Economic Policy Studies..
    9. Cotterill, Ron, 1980. "Changing Structure of Mass Media Markets: relevance for Policy Initiatives on Advertising in the Food System," Staff Papers 200623, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    10. Boynton, Robert D. & Perloff, Jeffrey M, 1982. "The short- and long-run effects of the vector grocery store consumer price information program," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7pj2234m, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Ronald W. Cotterill, 2007. "Market Definition and Market Power in the British Supermarket Industry," Food Marketing Policy Center Research Reports 098, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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