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The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment / Matias Busso, Sebastian Galiani.
- Format:
- Book
- Author/Creator:
- Busso, Matias.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20054.
- NBER working paper series no. w20054
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Causal Effect of Competition on Prices and Quality
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- This paper provides experimental evidence on the effect of increased competition on prices and quality in the retail sector. We randomized the entry of 61 firms into 72 markets serving the beneficiaries of a conditional cash transfer program in the Dominican Republic. Six months after the intervention entry into the market led to reductions in prices ranging from 2 to 6 percent and to a statistically significant improvement in self-reported service quality. Prices dropped more in areas where the number of entrants was larger. Competition seems to have driven part of the clientele away from incumbent retailers.
- Notes:
- Print version record
- April 2014.
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