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Is price dispersion always an indication of price discrimination?

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Is price dispersion always an indication of price discrimination?

Author: Alberro, José Luis - Higgins, Richard Physical Description: 37 páginas. Editorial: ECLAC Date: January 2015 ECLAC symbol: LC/MEX/L.1173 Serial Number: 160


It has been established for a long time that there is significant dispersion in prices charged for seemingly homogeneous goods. This may happen in competitive markets because the world is not frictionless, and certainly in other markets where price discrimination is carried out by firms with oligopolistic power. This paper is the first survey of the economic literature on price dispersion that addresses the following three key issues: i) its characteristics as a result of optimizing search behavior; ii) its relevance as a reflection of price discrimination and its consequences for social welfare and policy intervention; and iii) the empirical evidence of price dispersion. By contributing to a better understanding of price dispersion, this survey may help in the design and implementation of competition and anti-trust policies

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