Barriers to Retail Competition and Prices: Evidence from Spain

 
Author/Editor: Hoffmaister, Alexander W.
 
Publication Date: October 01, 2006
 
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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. 06/231
Subject(s): Competition | Spain | Prices | Markets | Economic models

Author's Keyword(s): Barriers to entry | Cournot-Nash model | regulation in goods markets | and panel cointegration
 
English
Publication Date: October 01, 2006
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2006231 Pages: 41
Price:
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