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This article empirically investigates the level of competition between superstores and smaller retailers in the Korean retail industry where market entry and operational hours of the former are restricted in order to protect the latter. Applying spatial econometric methods to storelevel price data from Seoul, we find that while spatial price correlations among same-size stores exist, product prices across different-size stores are spatially uncorrelated. This result implies that consumers may not view superstores' and smaller retailers' products as close substitutes, and thus their markets are likely to be segmented from each other. [ABSTRACT FROM AUTHOR]

This paper examines the profitability of behavior-based price discrimination ( BBPD) by duopolists producing horizontally differentiated experience goods. Considering a three-stage game in which the firms first make price discrimination decisions followed by two-stage pricing decisions, the two main results we obtain are the following: (i) if consumers underestimate the quality of the products at a level that is not very low, there are two subgame perfect Nash equilibria where both firms do not collect information about consumers' purchase histories so that neither firm price discriminates and where both firms collect consumer information to practice BBPD; (ii) BBPD is more profitable than uniform pricing if consumers overestimate at a more than moderate level. [ABSTRACT FROM AUTHOR]

By the amendment of the Pharmaceutical Affairs Act in 2012, non-pharmacy outlets (confined to 24-hour convenience stores) in Korea were permitted to sell 13 over-the-counter (OTC) drugs. This article empirically examines the effect of the regulatory reform on OTC drug prices. To do so, we use countylevel price data of 7 OTC drugs for the years of 2012 and 2013. Among them, 2OTC drugs are available at non-pharmacy outlets due to the deregulation, and the remaining 5 are still only available at pharmacies. Employing a difference-in-differences estimation strategy, we find that after the regulatory reform, prices of the 2 OTC drugs increased by only 1.1%while those of the rest 5 increased by 6.5%. This result has implications for the government's policy of designating non-pharmacy outlets that can sell OTC drugs from the viewpoint of consumer welfare. [ABSTRACT FROM AUTHOR]