Barriers to Retail Competition and Prices: Evidence From Spain
Electronic Access:
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Summary:
Why do prices in Spain's regions fail to converge? The prime suspects for this puzzling result are differences in regional barriers to entry in retail distribution. This paper develops a Cournot-Nash model of imperfect competition to illustrate the effect of barriers on prices. A unique data set-derived from an extensive analysis of competition policies in Spain- provides evidence that barriers to entry increase regional prices. The evidence also suggests that, consistent with the model's predictions, barriers to entry raise prices up to a point, and thus indicate that barriers have a threshold effect on prices.
Series:
Working Paper No. 2006/231
Subject:
Competition Consumer price indexes Econometric analysis Financial markets Inflation Prices Threshold analysis
English
Publication Date:
October 1, 2006
ISBN/ISSN:
9781451864915/1018-5941
Stock No:
WPIEA2006231
Pages:
41
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