Uniform Pricing in Retail Markets


This paper examines the empirical fact that large retail chains choose to set uniform prices across different local markets, forfeiting potentially large profits by not pricing to market. The paper contributes with a new explanation to uniform pricing strategies: heterogeneous consumers self-select into different product types. This alleviates both some concerns about optimality and distribution. Using a large and novel data set of itemized shopping receipts from the Norwegian grocery market, I offer some evidence of this explanation. I also highlight some important policy implications, as consumer self-selection matters for the effects of consumption taxes, and calculations of optimal tax rates.

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If you are not a member of the CBE research group but would like to attend the seminar, please send an email to the seminar organizers Mateusz Mysliwski or Øyvind Thommasen.