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The Effect of Input Price Discrimination on Retail Prices: Theory and Evidence from France
[L’effet de la discrimination des prix sur le marché amont sur les prix de détail : théorie et empiriques à partir du cas de la France]

Author

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  • 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] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique, IP Paris - Institut Polytechnique de Paris)

  • Claire Chambolle

    (Université Paris-Saclay, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

  • Stéphane Turolla

    (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

Abstract

We develop a model of vertical relations between national brand and private label producers and competing multi-product retailers to derive new predictions on the impact of input price discrimination on retail prices. A reform that lifted a ban on input price discrimination in France provides a natural experiment to test these predictions. Using household scanner data on food prices, we run a difference-in-differences analysis and show that the reform caused a significant decrease of the relative prices of national brand products. These results suggest a pro-competitive effect of authorizing input price discrimination.

Suggested Citation

  • Marie-Laure Allain & Claire Chambolle & Stéphane Turolla, 2022. "The Effect of Input Price Discrimination on Retail Prices: Theory and Evidence from France [L’effet de la discrimination des prix sur le marché amont sur les prix de détail : théorie et empiriques ," Working Papers hal-03826554, HAL.
    • Handle: RePEc:hal:wpaper:hal-03826554
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03826554v1
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    Cited by:

    1. Gohin, Alexandre & Matthews, Alan, 2024. "Ensuring farm minimum prices: Economic impacts of trade vs competition policies," International Economics, Elsevier, vol. 180(C).

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    Keywords

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    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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