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Modelling price dispersion as an outcome of competition in the Irish grocery market.

By Ciara Whelan and Patrick P. Walsh

Abstract

The paper empirically models price ispersion between related brands within roduct categories of the Irish Independent Grocery market. Retail brand prices are veraged over the independent shops stocking the brand. Since individual brands are etailed through different groups of shops, brands are priced over heterogeneous consumer segments. Brand price dispersion is estimated to increase with competition when conditioned on brand distribution structures, while controlling for other observed and unobserved deterministic factors. The data suggest that brand pricing across consumer groups induce varying degrees of localised price competition rather than pricing across segments to extract consumer willingness to pay.Competition; Product differentiation; Distributors (Commerce);Pricing--Ireland; Grocery trade--Ireland; Consumers--Attitudes;

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