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Strategic Obfuscation and Retail Pricing

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  • Richards, Timothy J.
  • Klein, Gordon
  • Bonnet, Celine
  • Bouamra-Mechemache, Zohra
Abstract
Consumer-product manufacturers—and retailers that sell their products—often sell slightly differentiated items for reasons other than appealing to heterogeneous tastes—different sizes of a popular brand, or different flavors in a common product line for instance. We argue that this practice is a form of strategic obfuscation, which is intended to make price-comparison more difficult, and thereby raise margins on non-comparable products. We test our hypothesis with the use of examples from consumer-packaged good categories in German and French retail scanner data. We find that—after controlling for other explanations for how margins can vary with package size and type—we cannot rule out strategic obfuscation as a feature of our retail sales data.
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  • Richards, Timothy J. & Klein, Gordon & Bonnet, Celine & Bouamra-Mechemache, Zohra, 2017. "Strategic Obfuscation and Retail Pricing," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258021, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea17:258021
    DOI: 10.22004/ag.econ.258021
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    Cited by:

    1. Edona Reshidi, 2022. "Vertical Bargaining and Obfuscation," Staff Working Papers 22-13, Bank of Canada.
    2. Stephen Martin, 2018. "Behavioral antitrust," Chapters, in: Victor J. Tremblay & Elizabeth Schroeder & Carol Horton Tremblay (ed.), Handbook of Behavioral Industrial Organization, chapter 15, pages 404-454, Edward Elgar Publishing.
    3. Richards, Timothy J. & Paudel, Ujjwol, 2024. "Minimum Wages and Pass-Through," 2024 Annual Meeting, July 28-30, New Orleans, LA 343648, Agricultural and Applied Economics Association.
    4. Helliar, C.V. & Lowies, B. & Suryawathy, I.G.A. & Whait, R. & Lushington, K., 2022. "The genre of banking financial product information: The characters, the setting, the plot and the story," The British Accounting Review, Elsevier, vol. 54(5).

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    More about this item

    Keywords

    Industrial Organization; Demand and Price Analysis; Research Methods/Statistical Methods;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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