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International Price Dispersion and Market Segmentation in Japan and the United States: Theory and Empirics

Author

Listed:
  • Fung, Kwok-Chiu

    (Asian Development Bank Institute)

  • Garcia-Herrero, Alicia

    (Asian Development Bank Institute)

  • Ng, Francis

    (Asian Development Bank Institute)

Abstract

This paper focuses on the pricing behavior of Japanese and United States firms selling their identical products in New York City, Chicago, Osaka, and Tokyo. The authors utilize some simple models of international price dispersion and market segmentation that generate predictions about testable prices. The dataset, which consists of prices of identical products in the Japanese and American cities, was collected and accepted by both governments. Using this data, versions of international price dispersion theories are tested and some empirical evidence to support the view that simple international price dispersion models can partly explain the observed prices is found.

Suggested Citation

  • Fung, Kwok-Chiu & Garcia-Herrero, Alicia & Ng, Francis, 2013. "International Price Dispersion and Market Segmentation in Japan and the United States: Theory and Empirics," ADBI Working Papers 417, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0417
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    pricing behavior; price dispersion; price dispersion theories; international price dispersion;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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