American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Price Discrimination and Bargaining: Empirical Evidence from Medical Devices
American Economic Review
vol. 103,
no. 1, February 2013
(pp. 145–77)
Abstract
Many important issues in business-to-business markets involve price discrimination and negotiated prices, situations where theoretical predictions are ambiguous. This paper uses new panel data on buyer-supplier transfers and a structural model to empirically analyze bargaining and price discrimination in a medical device market. While many phenomena that restrict different prices to different buyers are suggested as ways to decrease hospital costs (e.g., mergers, group purchasing organizations, and transparency), I find that: (i) more uniform pricing works against hospitals by softening competition; and (ii) results depend ultimately on a previously unexplored bargaining effect. (JEL C78, L13, L14, L64)Citation
Grennan, Matthew. 2013. "Price Discrimination and Bargaining: Empirical Evidence from Medical Devices." American Economic Review, 103 (1): 145–77. DOI: 10.1257/aer.103.1.145Additional Materials
JEL Classification
- C78 Bargaining Theory; Matching Theory
- L13 Oligopoly and Other Imperfect Markets
- L14 Transactional Relationships; Contracts and Reputation; Networks
- L64 Other Machinery; Business Equipment; Armaments