Price Discrimination within and Across Emu Markets: Evidence from French Exporters

59 Pages Posted: 9 Sep 2019 Last revised: 20 Mar 2022

See all articles by Francois Fontaine

Francois Fontaine

Paris School of Economics; IZA Institute of Labor Economics

Julien Martin

University of Quebec at Montreal (UQAM)

Isabelle Mejean

International Monetary Fund (IMF)

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Date Written: September 2019

Abstract

We study the cross-sectional dispersion of prices paid by EMU importers for French products. We document a significant level of price dispersion both within product categories across exporters, and within exporters across buyers. This latter source of price discrepancies, sellers' price discrimination across buyers, is indicative of deviations from the law-of-one price. Price discrimination (i) is substantial within the EU, within the euro area, and within EMU countries; (ii) has not decreased over the last two decades; (iii) is more prevalent among the largest firms and for more differentiated products; (iv) is lower among retailers and wholesalers; (v) is also observed within almost perfectly homogenous product categories, which suggests that a non-negligible share of price discrimination is triggered by heterogeneous markups rather than quality or composition effects. We then estimate a rich statistical decomposition of the variance of prices to shed light on exporters' pricing strategies.

Suggested Citation

Fontaine, Francois and Martin, Julien and Mejean, Isabelle, Price Discrimination within and Across Emu Markets: Evidence from French Exporters (September 2019). NBER Working Paper No. w26246, Available at SSRN: https://ssrn.com/abstract=3450272

Francois Fontaine (Contact Author)

Paris School of Economics ( email )

48, boulevard Jourdan
Paris, 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Julien Martin

University of Quebec at Montreal (UQAM) ( email )

PB 8888 Station DownTown
Succursale Centre Ville
Montreal, Quebec H3C3P8
Canada

Isabelle Mejean

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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