A single espresso, please! Rationalizing espresso price dispersion across Italian cities

Delbono, Flavio ; Dipoppa, Gemma ; Lambertini, Luca ; Reggiani, Carlo (2015) A single espresso, please! Rationalizing espresso price dispersion across Italian cities. Bologna: Dipartimento di Scienze economiche DSE, p. 18. DOI 10.6092/unibo/amsacta/4311. In: Quaderni - Working Paper DSE (1017). ISSN 2282-6483.
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Abstract

This paper aims at providing an explanation of the observed espresso price dispersion across major Italian cities. The empirical evidence suggests a positive relationships between the average espresso price in a city and the number of coffee shops (normalized for the adult population) operating in that city. This finding is shown to be robust after controlling for GDP per capita and consumers.price index. We provide an interpretation of the empirical findings relying on a model of price competition delivering a continuum of Nash equilibria, where firms adjust the mark-up to offset the negative effect of any increase in their number.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Delbono, Flavio
Dipoppa, Gemma
Lambertini, Luca
Reggiani, Carlo
Keywords
price dispersion, espresso prices, market competition
Subjects
ISSN
2282-6483
DOI
Deposit date
17 Jul 2015 08:25
Last modified
23 Oct 2015 09:03
URI

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