Business, Management and Accounting
4 years ago

Retailers strategically set prices to target different types of buyers.

1 view
American Economic Journal Microeconomics
Relative Price Dispersion: Evidence and Theory
Greg Kaplan, Guido Menzio, Leena Rudanko, Nicholas Trachter

Paper Summary

Relative price dispersion refers to different prices set by retailers for one item compared to others. It makes up 30% of price variations for the same item in the same market. Sellers use this strategy to charge higher prices to customers who buy everything in one store, while offering lower prices to those who shop around.

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