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Price Rigidity and Market Power in German Retailing

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  • Weber, Sascha A.
  • Anders, Sven M.

Abstract

This paper presents empirical evidence on the interplay important topics of consumer price rigidity and market power in the German food retail industry. In particular, the analysis addresses the causal relationship between market structure - collusion - and pricing behaviour highlighted in the industrial organization literature. Extensive analysis of retail scanner data across beef and pork products reveals considerable differences in price rigidity across store types. Supermarket pricing behaviour is evaluated with respect to all price changes, retail sales actions and price adjustments indicating that food discounters exhibit the highest degree of rigid prices. Retail concentration, as an important explanatory factor of price stickiness is investigated via the analysis of retail market power employing a conjectural variation approach. The analysis of market conduct in the marketing of beef and pork products indicates simultaneous oligopolistic and oligopsonistic behaviour of retail firms.
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  • Weber, Sascha A. & Anders, Sven M., 2005. "Price Rigidity and Market Power in German Retailing," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24721, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24721
    DOI: 10.22004/ag.econ.24721
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    2. Craigwell, Roland & Moore, Winston & Worrell, DeLisle, 2011. "Does Consumer Price Rigidity Exist in Barbados?," MPRA Paper 40928, University Library of Munich, Germany.
    3. Mahoozi, Hosnieh, 2015. "Multiple dimensions of regional variation of impoverishment in Iran," Discussion Papers 70, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    4. Daniel Levy, 2007. "Price rigidity and flexibility: new empirical evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 639-647.
    5. Holzer, Patrick Sebastian, 2020. "The effect of time-varying factors on promotional activity in the German milk market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    6. Tsion Taye Assefa & Miranda P.M. Meuwissen & Cornelis Gardebroek & Alfons G.J.M. Oude Lansink, 2017. "Price and Volatility Transmission and Market Power in the German Fresh Pork Supply Chain," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 861-880, September.
    7. Sven Anders & Anke Mőser, 2010. "Consumer Choice and Health: The Importance of Health Attributes for Retail Meat Demand in Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(2), pages 249-271, June.
    8. Shailender Singh & Chen Guan-Ru, 2020. "Modeling variations in price inertia under demand uncertainty," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(1), pages 26-42, February.

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