Publicação
Price complexity in the German mobile communication market
| Resumo: | In recent years, pricing schedules across different markets and industries have become increasingly complex. A concern is that firms may engage in obfuscation to soften price competition. However, theoretical literature is not consensual regarding the relationship between prices and obfuscation strategies. This paper provides an empirical analysis of firms’ obfuscation strategies. I introduce a novel dataset which includes all firms that compete in the German mobile communication market and construct measures of obfuscation that depend on observable criteria on pricing schedules. The results indicate that some obfuscation devices have a positive and significant relationship with prices. More recent studies suggest that, in equilibrium, the most prominent firms use high levels of obfuscation. To this end, I use the number of Google searches as a proxy for firm prominence and find that prominent firms not only charge higher prices, but also obfuscate the most. Moreover, I analyze which firms are present on the two largest price-comparison websites in Germany and find that some firms offer platform-specific discounts (that is a discount available only to consumers who purchase through the platform). The results indicate that the higher the price of a firm, the more likely it is to offer platform-specific discounts. This evidence supports that firms use platform-specific discounts as a price-discriminatory tool to attract pricesensitive. consumers who use price-comparison platforms. |
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| Autores principais: | Kamp, Richard Werner Martin |
| Assunto: | Obfuscation Prominence Prices Platforms |
| Ano: | 2019 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso restrito |
| Instituição associada: | Universidade Católica Portuguesa |
| Idioma: | inglês |
| Origem: | Veritati - Repositório Institucional da Universidade Católica Portuguesa |
| Resumo: | In recent years, pricing schedules across different markets and industries have become increasingly complex. A concern is that firms may engage in obfuscation to soften price competition. However, theoretical literature is not consensual regarding the relationship between prices and obfuscation strategies. This paper provides an empirical analysis of firms’ obfuscation strategies. I introduce a novel dataset which includes all firms that compete in the German mobile communication market and construct measures of obfuscation that depend on observable criteria on pricing schedules. The results indicate that some obfuscation devices have a positive and significant relationship with prices. More recent studies suggest that, in equilibrium, the most prominent firms use high levels of obfuscation. To this end, I use the number of Google searches as a proxy for firm prominence and find that prominent firms not only charge higher prices, but also obfuscate the most. Moreover, I analyze which firms are present on the two largest price-comparison websites in Germany and find that some firms offer platform-specific discounts (that is a discount available only to consumers who purchase through the platform). The results indicate that the higher the price of a firm, the more likely it is to offer platform-specific discounts. This evidence supports that firms use platform-specific discounts as a price-discriminatory tool to attract pricesensitive. consumers who use price-comparison platforms. |
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