تبعیض قیمت کانال های خرده فروشی

This paper examines price differentials of identical items across retail channels. Many consumer packaged goods are sold through both grocery and drug stores. Liquor is unique in that in much of the country there is a third retail channel of distribution, liquor stores. If consumers in each retail channel differ in their willingness to pay for certain items, then sellers can exploit those differences and charge different prices for the same items in each channel. We examine a unique data set of pooled cross sectional retail scanner data on wine to test whether sellers use retail channel to identify heterogeneous consumer market segments and engage in price discrimination. We begin by presenting a model of price discrimination by retail channel along with behavioural assumptions regarding shoppers in each channel. Next we examine sales by retail channel and find persistent price differentials for the same item across retail channel after controlling for sample selection bias and seasonality. Lastly, we estimate the price elasticity of demand correcting for endogeneity and find differences across channel consistent with the price differentials. The extent of price differential, however, differs significantly with respect to price point.

This paper investigates the difference in price of identical items across retail channel. We argue that these retail channel price differentials are a form of first degree or market segmented price discrimination in which consumers, who differ in their price elasticities of demand, self-select themselves into each retail channel. Modern concepts of price discrimination in non-competitive markets go back at least to Pigou (1920), whose categorization of price discrimination into first, second and third degree is still used today. Robinson (1933) elaborated on the conditions required for firms to engage in effective third degree price discrimination, namely that there exist identifiable market segments that differ in their price elasticities of demand. Using this background, Blattberg and Sen, 1974 and Blattberg and Sen, 1976 and Blattberg et al. (1978) show how market segmentation based on identifiable demographic characteristics can be effectively exploited. More recently, Hoch et al. (1995) use scanner data to show how demographic characteristics can be used to price discriminate by store location. Where differences in price elasticity are not easily identifiable, Moorthy (1984) provides a model where firms exploit differences in consumer preferences across market segments by offering product variants at different prices, allowing consumers to self-select among those products. More generalized models of price discrimination in contestable markets with differentiated products have been developed by Salop and Stiglitz (1977), Narasimhan (1984), Borenstein (1985) and Holmes (1989). The type of consumer behavior closest to that examined in this paper is that of Narasimhan (1984), who presents a model of coupon use as a form of price discrimination for identical goods. Specifically, Narasimhan presents a model in which consumers, who differ in their price elasticity of demand, self-select themselves into coupon use based on comparing the savings associated with using coupons with the opportunity cost of using coupons. We extend this model by allowing consumers to compare the savings associated with one retail outlet with the associated opportunity cost as defined in Kahn and Schmittlein (1989) and Bell et al. (1998). Finally, with respect to retail channel, Gerstner et al. (1994) examine price discrimination by retail channel, however, their paper concentrates on the effect of retailer mark-up on the size of discount offered, while Park and Keh (2003) look at the effect of manufacturers utilizing both the traditional retail channel as well as selling direct to consumers. Our paper, on the other hand, provides a unique perspective on the use of retail channel itself as a means of price discrimination.

Increased competition both domestically and internationally has led firms to seek new sources of revenue. Price discrimination across all dimensions, time, space, demographic characteristics and offline versus online is one means of extracting surplus from consumers. The proliferation of social network coupon sites is an illustration of this. We show that use of retail channel is an effective means of price discrimination based on demographic self-selection and shopping intent. While the current research shows a clear and consistent pattern of discriminatory price differentials for a single category of goods, wine, there is no reason to believe that other categories are not following similar behavior. If not, we show that the opportunity may exist.