Two transparencies, same market, opposite signs
Same lead author, same hospital-supply market, opposite directions. Sellers publishing one price moved surplus to sellers; buyers learning peer prices moved it to buyers. Only the first is a thing a pricing page can do.
| Dimension | Grennan (2013) | Grennan & Swanson (2020) |
|---|---|---|
| The intervention | Price discrimination ends: every hospital pays the same | Buyers gain peer-price benchmarking data |
| Who gets the information | Nobody: prices are made uniform | The buyers |
| Prices paid | Rose 1.7% | Fell 3.3% on physician-preference items; 3.9% in high volume; 1.6% on commodities |
| Where the surplus went | To sellers: manufacturer profits +8%, hospital surplus −1.4% | To buyers: savings concentrated on those who had been paying high prices |
| What a pricing page can do | This one | Not this one: your page cannot show what others paid |
Swipe or scroll horizontally if the table is wider than your screen.
Reference & Evidence
Source: Grennan (2013), American Economic Review 103(1), Table 7, p. 170: the competitive effect at observed bargaining strength, never the price-taking scenario the author disqualifies. Grennan & Swanson (2020), Journal of Political Economy 128(4), results as stated in the text: the deposit carries no page numbers. Both read in full.
Each line is a claim from the register this journal publishes against, resolved from the register at build time.
- A The setting and the question, in the author's words: the paper "estimates the welfare effects of different hospitals paying differ"ent prices "in the market for coronary stents", and the headline is that "more uniform pricing works against hospitals by softening competition". Table 7 (p. 170) gives the competitive-effect magnitudes: prices +1.7%, manufacturer profits +8%, hospital surplus −1.4%, total welfare +0.7% Grennan (2013), American Economic Review 103(1), 145–177 · VoR held ·
GREN13-C1 - A Hospitals gaining peer-price benchmarking saved 3.3% on physician-preference items and 3.9% where buying in high volume: "under transparency for hospitals purchasing PPIs at formerly high prices (3.3% savings) and in relatively high quantities (3.9% savings)". The object of study is the information, not the price level: "we empirically examine the effect of transparency in the form of benchmarking information on prices negotiated by hospitals and their suppliers" Grennan & Swanson (2020), Journal of Political Economy 128(4), 1234–1268 · VoR held, no page citations ship ·
GS20-C1
Grades: A, verified against the printed page of the primary source · B, primary source, text layer only · C, authoritative secondary · D, reported.
Related exhibits
-
The Economic Value to the Customer (EVC) framework
From the essay What is value-based pricing?
-
The tier-promise and cost boundary
From the essay Tiered pricing is a promise with a cost-to-serve boundary
-
Read it off your own pricing page
From the essay Your pricing page publishes which buyers you won’t separate.