Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 468: Price Discrimination in Oligopoly: Evidence from Swedish Newspapers

Marcus Asplund (), Rickard Eriksson and Niklas Strand
Additional contact information
Marcus Asplund: Department of Economics, London Business School, Postal: London Business School, Regent’s Park, NW1 4SA London, UK,
Rickard Eriksson: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Niklas Strand: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: This paper provides an empirical examination of third-degree price discrimination in the Swedish newspaper industry. The results show that price discrimination is more prevalent in competitive markets and among newspapers with low market shares. This supports predictions from recent theoretical work, including Chen (1997) and Fudenberg and Tirole (2000), which suggest that firms attempt to poach consumers from rivals by offering targeted discounts. In addition, we find weak evidence of newspapers in markets with large inflows of new consumers and those covering wide geographical areas offering more discounts.

Keywords: Price discrimination; oligopoly; newspapers

JEL-codes: D43; L13; L82

20 pages, First version: October 25, 2001. Revised: January 1, 2007.

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