(Mis)measuring prices in an era of globalisation

David Byrne, Brian Kovak, Ryan Michaels 03 April 2014

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China’s integration into world markets over the past 35 years has been dramatic both in pace and scope. An important aspect of this growth has been China’s expansion into relatively sophisticated product categories (Rodrik 2006, Schott 2008). In such cases one wonders whether the lower prices offered by Chinese firms reflect true discounts, or rather lower product quality (Schott 2008).

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Topics:  Industrial organisation

Tags:  imperfect competition, switching costs

Switching costs and competition in retirement investment

Fernando Luco 10 February 2014

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Switching costs deter consumers from switching to alternative products and often result in high prices. As a result, they have become a concern for policymakers who worry about how well markets perform. Examples of markets in which switching costs play a significant role include health insurance (Handel 2013, Nosal 2012) and pay TV (Shcherbakov 2013). In practice, it is difficult to implement specific policies to reduce the impact of switching costs on competition, prices, and welfare, as switching costs arise due to multiple reasons (Klemperer 1995).

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Topics:  Industrial organisation

Tags:  imperfect competition, switching costs, insurance markets