We consider vertical contracts where the retail market may involve search frictions. Minimum advertised price restrictions (MAP) act as a restraint on customers’ information and so can increase search frictions in the retail sector. Such restraints, thereby, soften retail competition—an impact also generated by resale price maintenance (RPM). However, by accommodating (consumer or retailer) het...

This paper presents a model for designing the pricing policies for the supply chain whose channel is integrated with retail and e-tail. In order to incentive the retailer, the manufacture in the supply chain adopts return policy promising that any unsold product can be returned to the manufacture for a partial refund in the end of the selling season. How can the manufacture coordinate the prici...

Using retail purchase data reported by Nielsen‘s Homescan panel this study investigates the U.S. demand for organic and conventional fresh fruits. The study fills an important research void by estimating the much needed income and price elasticities for organic and conventional fruits utilizing a censored demand approach. Household income is found to affect organic fruit consumption. Consumers ...

In liberalized telecommunications markets, the incumbent typically enjoys several advantages over any entrant. Regulation in such asymmetric markets is successful if retail prices are low and the entrant’s pro...ts are high so that entry is encouraged. I show that asymmetric access price regulation with a cost-based access price for the incumbent and an access markup for the entrant is more suc...

This paper investigates the nature of competition in the retail gasoline market using a two year panel data of weekly prices for gas stations in San Diego county. The primary dimension of product differentiation in the retail gasoline market is spatial in the sense that a gas station’s market power depends on the locations of all other gas stations. In contrast to previous empirical studies, I ...

funding provided by participating member commissions of the National Association of Regulatory Utility Commissioners (NARUC). The views and opinions of the author do not necessarily state or reflect the views, opinions, or policies of the NRRI, the NARUC, or NARUC member commissions. Executive Summary When a state considers electric restructuring, a commonly expressed concern is that the introd...

For many products the average price paid by consumers falls during periods of high demand. We use information from a large supermarket chain to decompose the decrease in the average price into a substitution effect, due to an increase in the share of cheaper products, and a price reduction effect. We find that for almost all the products we study the substitution effect explains a large part of...

Local retail gasoline markets offer a relatively low cost opportunity to test a number of hypotheses from the industrial organization literature regarding the interdependence of pricing choices. Is there tacit collusion among retailers? Or does the strong correlation of prices represent the natural workings of a highly competitive market (i.e. the law of one price)? Is there evidence of price l...