Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

Abstract: This paper documents price discrimination by transport companies, revealing their market power. Larger shipments of similar products sharing a container receive lower prices. A trade model with non-linear pricing of transportation rationalizes this with economies of scale and price discrimination, highlighting their distinct policy implications. To distinguish them, I test for the effect of competition on freight price variation specific to price discrimination. Using unexpected water level changes to instrument for competition in river transportation, I find increased competition causes steeper discounts for larger shipments. Thus, market power in transportation is less distortionary for larger firms gaining additional cost advantages.

Keywords: price discrimination; quantity discounts; transportation; competition; economies of scale; mark-ups; market power

JEL-codes: D22; D43; F10; F12; F14

Language: English

59 pages, April 26, 2024

Full text files

3130324  Full text

Download statistics

• Norwegian School of Economics, Department of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Synne Stormoen ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:nhheco:2024_006This page generated on 2025-02-10 09:49:47.