Market Concentration , Price Dispersion , and Ine cient Cross - hauling in the Laboratory ∗
نویسندگان
چکیده
This paper presents experimental evidence suggesting that persistant price dispersion that violates the law of one price may be a disequilibrium phenomena. Increasing market concentration increases the pecuniary incentive to give a best response and satisfy the law of one price, that is, a few large rms have a larger pecuniary incentive to solve the allocation coordination problem than many small rms. In the two rm treatment, the law of one price holds. However, in both treatments with small rms or transportation costs we observe persistant price dispersion. The paper also nds evidence of ine cient cross-hauling for purely strategic reasons when transportation costs are introduced.
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