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Local or national pricing : what consequences for merger control in the food retail sector ?
[Política de precios local o nacional: ¿qué impacto tiene el control de las fusiones en el sector de la distribución?]

Author

Listed:
  • Marie-Laure Allain

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • Claire Chambolle

    (ALISS - Alimentation et sciences sociales - INRA - Institut National de la Recherche Agronomique)

  • Stéphane Turolla

    (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)

Abstract

The food retail sector is characterized by highly localized competition among multi-market retailers. Multi-store retailers may either price-discriminate spatially (local pricing) or adopt a uniform pricing strategy among local markets. We analyze how this choice affects the effect of a merger on consumer surplus. We show that when one retailer adopts uniform pricing across stores, the anticompetitive effect of the merger on consumer welfare spreads on markets non directly affected by the merger. In addition, the effect of the merger on directly affected markets is enhanced when these markets are sufficiently more competitive than markets non directly affected by the merger. These results lead to reconsider the definition of relevant markets in merger control when one multi-market retailer uses uniform pricing.

Suggested Citation

  • Marie-Laure Allain & Claire Chambolle & Stéphane Turolla, 2016. "Local or national pricing : what consequences for merger control in the food retail sector ? [Política de precios local o nacional: ¿qué impacto tiene el control de las fusiones en el sector de la ," Post-Print hal-03542125, HAL.
    • Handle: RePEc:hal:journl:hal-03542125
    DOI: 10.3917/reco.hs01.0053
    Note: View the original document on HAL open archive server: https://hal.science/hal-03542125
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    Cited by:

    1. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia B. Villas-Boas, 2017. "Retail Mergers and Food Prices: Evidence from France," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 469-509, September.

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