DP3269 Price Discrimination in Oligopoly: Evidence from Swedish Newspapers

Author(s): Björn Marcus Asplund , Rickard Eriksson , Niklas Strand

Publication Date: March 2002

Keyword(s): price discrimination , oligopoly , newspapers

JEL(s): D43 , L13 , L82

Programme Areas: Industrial Organization

Link to this Page: www.cepr.org/pubs/dps/DP3269.asp

This Paper provides an empirical examination of third-degree price discrimination in the Swedish newspaper industry. The results show that price discrimination is more prevalent in competitive markets and among newspapers with low market shares. This supports predictions from recent theoretical work, including Chen (1997) and Fudenberg and Tirole (2000), that suggest that firms attempt to poach consumers from rivals by offering targeted discounts. In addition, we find weak evidence that newspapers in markets with large inflows of new consumers and those covering wide geographical areas offer more discounts.