TY - JOUR
T1 - Strategic Obfuscation and Retail Pricing
AU - Richards, Timothy J.
AU - Klein, Gordon J.
AU - Bonnet, Celine
AU - Bouamra-Mechemache, Zohra
N1 - Funding Information:
The research leading to these results has received funding from the European Research Council under the European Community’s Seventh Framework Programme (FP7/2007-2013) Grant Agreement No. 340903. Support from the Agricultural and Food Research Initiative (NIFA, USDA) is also gratefully acknowledged. The authors wish to thank seminar participants at the Toulouse School of Economics and at the Agricultural and Applied Economics Association annual meetings (Boston, MA). All remaining errors are our own.
Funding Information:
The research leading to these results has received funding from the European Research Council under the European Community’s Seventh Framework Programme (FP7/2007-2013) Grant Agreement No. 340903. Support from the Agricultural and Food Research Initiative (NIFA, USDA) is also gratefully acknowledged. The authors wish to thank seminar participants at the Toulouse School of Economics and at the Agricultural and Applied Economics Association annual meetings (Boston, MA). All remaining errors are our own.
Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.
PY - 2020/12
Y1 - 2020/12
N2 - Consumer-product manufacturers—and retailers that sell their products—often sell slightly differentiated items for reasons other than appealing to heterogeneous tastes—different sizes of a popular brand, or different flavors in a common product line for instance. We argue that this practice is a form of strategic obfuscation, which is intended to make price-comparison more difficult, and thereby raise margins on non-comparable products. We test our hypothesis with the use of examples from consumer-packaged good categories in German and French retail scanner data. We find that—after controlling for other explanations for how margins can vary with package size and type—we cannot rule out strategic obfuscation as a feature of our retail sales data.
AB - Consumer-product manufacturers—and retailers that sell their products—often sell slightly differentiated items for reasons other than appealing to heterogeneous tastes—different sizes of a popular brand, or different flavors in a common product line for instance. We argue that this practice is a form of strategic obfuscation, which is intended to make price-comparison more difficult, and thereby raise margins on non-comparable products. We test our hypothesis with the use of examples from consumer-packaged good categories in German and French retail scanner data. We find that—after controlling for other explanations for how margins can vary with package size and type—we cannot rule out strategic obfuscation as a feature of our retail sales data.
KW - Differentiation
KW - Price discrimination
KW - Retail pricing
KW - Strategic obfuscation
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U2 - 10.1007/s11151-019-09744-z
DO - 10.1007/s11151-019-09744-z
M3 - Article
AN - SCOPUS:85077093418
SN - 0889-938X
VL - 57
SP - 859
EP - 889
JO - Review of Industrial Organization
JF - Review of Industrial Organization
IS - 4
ER -