Drug Pricing Transparency: The New Retail Revolution

Price Transparency and Retail Prices

Price transparency initiatives are typically undertaken by third parties to ensure that consumers can compare the prices of competing offers in markets where obtaining such information is costly. Such practices have recently become widespread, yet it is unclear whether the increased price competition due to lower search costs overcomes the potential for collusion between competitors due to lowe...

Fictitious Pricing in Retail

Prices in a wide variety of contexts come in three parts: an “original” or “suggested” price, a discount off that price, and the final price. Little empirical evidence is available that speaks to how each pricing component affects purchase behavior, even as theories abound. This paper outlines the main theories of fictitious pricing with their corresponding predictions and examines their releva...

Pricing in Retail Gasoline Markets

Strategic Obfuscation and Retail Pricing

Retailers often stock items that are only slightly di¤erentiated from others’–di¤erent sizes of a popular brand, or di¤erent ‡avors in a common product line for instance. We argue that this practice is a form of strategic obfuscation, intended to raise consumer search costs, and margins on non-comparable products. We test our hypothesis using examples from several product categories in German a...

Zone Pricing in Retail Oligopoly

Multi-store retailers have the ability to offer different prices based on the geography of their stores. They sometimes do, but often only to a limited extent. This is observed in home improvement retailing, where the large retail chains charge different prices nationally but opt not to set prices store-by-store or even by market. Instead, prices are assigned to zones spanning several markets t...