Date of this Version
American Economic Review
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.
Matthew, G. (2013). Price Discrimination and Bargaining: Empirical Evidence From Medical Devices. American Economic Review, 103 (1), 145-177. http://dx.doi.org/10.1257/aer.103.1.145
Date Posted: 27 November 2017
This document has been peer reviewed.