Glossary of competition terms

This Glossary was prepared by DG COMP and the OECD for non-competition specialists. Each term is enriched with references of national case laws from the e-Competitions Bulletin. (© European Union - © OECD)

Administered Prices

Administered prices are prices set by firms that do not vary in response to short-run fluctuations in demand and supply conditions. This price rigidity has been viewed by some economists as arising from the exercise of market power. Various research studies have been conducted attempting to link administered prices to concentration and inflation. What emerges from the findings is that there are differences across industries (and across countries) in the degree of price flexibility which simple models of market clearing cannot fully explain. However, researchers have been confronted with serious measurement difficulties, notably the fact that official price indices often do not reflect price discounts. (...)