Price Discrimination in Oligopoly: Evidence from Swedish Newspapers

This paper provides an empirical examination of third-degree price discrimination in the Swedish newspaper industry. The results show that price discrimination is more prevalent in competitive markets and among newspapers with low market shares. This supports predictions from recent theoretical work, including Chen (1997) and Fudenberg and Tirole (2000), which suggest that firms attempt to poach consumers from rivals by offering targeted discounts. In addition, we find weak evidence of newspapers in markets with large inflows of new consumers and those covering wide geographical areas offering more discounts.