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Your search keyword '"Hassink, Wolter H.J."' showing total 2 results
Start Over Author "Hassink, Wolter H.J." Topic price discrimination
2 results on '"Hassink, Wolter H.J."'

1. On Price-Setting for Identical Products in Markets without Formal Trade Barriers

Author

Hassink, Wolter H.J. and Schettkat, Ronald

Subjects
price discrimination, Außenhandelspreis, Preisdifferenzierung, Möbelhandel, Price setting, %22">IKEA Svenska Försa&Öljnings AB <Ödäkra>, Betriebliche Preispolitik, ddc:330, EU-Staaten, Internationaler Preiszusammenhang, D4, Schätzung
Abstract

This paper investigates price-setting for truly homogenous products sold in markets without any formal trade barriers. We use data from IKEA, a furniture company selling identical products in an identical shopping environment in different EU countries. We get four remarkable outcomes: 1) The law of one price does not hold. 2) Country-specific effects of non-tradable cost components are important. 3) Pricing to the market surely occurs but price discrimination is limited by incomplete information. 4) The unexplained part of betweencountry price variation for identical products is about 75% which leaves most of the intercountry price variation unexplained.

Published
2001

2. Price discrimination between EU regions.

Author

Hassink, Wolter H.J. and Schettkat, Ronald

Subjects
*PRICE discrimination, *RESTRAINT of trade, *PRICING, *PRICES
Abstract

Prices of identical products differ tremendously among EU countries. Prices of IKEA products range by more than 40% on average, which is far more than the 12% price difference the EU Commission regards as compatible with competitive markets. These price differences can only partly be attributed to differences in non-tradable cost components between countries (such as wage costs or value-added taxes). The economic explanation for this phenomenon is that consumers are hardly aware of differences in prices across countries and that transportation costs are too high to make arbitrage profitable. Market intransparency for the consumer allows firms to discriminate between regional markets. However, knowledge of market-specific demand conditions is very limited leaving firms to find the profit maximising price in a trial-and-error process. [ABSTRACT FROM AUTHOR]

Published
2003
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