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

Abstract

AbstractI 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.