Price dynamics of Swedish pharmaceuticals
Publication Type
Journal Article
Publication Date
10-2022
Abstract
This paper investigates price patterns of off-patent pharmaceuticals in Sweden. I show that price dynamics are dependent on the number of competitors in the market. The price patterns follow predictions from a model of dynamic price competition in which the demand for pharmaceuticals incorporates the known biases of consumers: habit persistence and brand preferences. Using the regulated market of Swedish pharmaceuticals, I show that price dynamics may help in identifying possible tacit collusion by manufacturers in markets where consumers experience behavioral frictions.
Keywords
Pharmaceutical pricing, Dynamic oligopoly, State dependence, Price cycles
Discipline
Industrial Organization
Research Areas
Applied Microeconomics
Publication
Quantitative Marketing and Economics
Volume
20
First Page
313
Last Page
351
ISSN
1570-7156
Identifier
10.1007/s11129-022-09257-2
Publisher
Springer Verlag (Germany)
Citation
JANSSEN, Aljoscha.
Price dynamics of Swedish pharmaceuticals. (2022). Quantitative Marketing and Economics. 20, 313-351.
Available at: https://ink.library.smu.edu.sg/soe_research/2677
Additional URL
https://doi.org/10.1007/s11129-022-09257-2