Price discrimination and market concentration: Evidence from the laundry detergent market

Abstract

I analyse the relationship between price discrimination, with respect to the package size of the product, and market concentration in the liquid laundry detergent market. Specifically, I study how quantity discounts change with market concentration. I estimate a fixed effects model and find that this relationship is non-monotonic and I provide evidence that it is U-shaped. These results suggest that firms offer more quantity discounts in less and more concentrated markets, while they offer less quantity discounts in moderately concentrated markets.