Supermarket Choice and Supermarket Competition in Market Equilibrium ¤
نویسنده
چکیده
Multi-store ...rms are common in the retailing industry. Theory suggests that cross-elasticities between stores of the same ...rm enhance market power. To evaluate the importance of this e¤ect in the UK supermarket industry, we estimate a model of consumer choice and expenditure using three data sources: pro...t margins for each chain, a survey of consumer choices, and a data set of store characteristics. To permit plausible substitution patterns, the utility model interacts consumer and store characteristics. We measure market power by calculating the e¤ect of merger and demerger on Nash equilibrium prices. Demerger reduces the prices of the largest ...rms by between 2% and 3.8% depending on local concentration; mergers betwen the largest ...rms lead to price increases up to 7.4%.
منابع مشابه
On the Stability of Store Format Choice
Inc. for providing the data used in this study and David Bell for assistance with the use of the data. We also thank the editor and three anonymous reviewers for their comments and suggestions. This paper investigates the nature of segmentation in store choice behavior where competing supermarkets offer Every Day Low Price (EDLP) and High-Low Promotional Price (HILO) formats. Previous research,...
متن کاملCompetition and product quality in the supermarket industry.
This article analyzes the effect of competition on a supermarket firm's incentive to provide product quality. In the supermarket industry, product availability is an important measure of quality. Using U.S. Consumer Price Index microdata to track inventory shortfalls, I find that stores facing more intense competition have fewer shortfalls. Competition from Walmart—the most significant shock to...
متن کاملQuality competition in retailing: A structural analysis
This paper presents empirical evidence that endogenous fixed costs play a central role in determining the equilibrium structure of the retail food industry. Using the framework developed in Sutton [Sutton, J. (1991). Sunk Cost and Market Structure: Price Competition, Advertising, and the Evolution of Concentration (MIT Press, Cambridge).], I construct a structural model of retail competition in...
متن کاملMulti-Product Competition, Shopping Costs, and Market Power: A Model of Supermarket Pricing∗
A supermarket brings together product cateogories (e.g. bread, meat) that traditionally are sold separately in specialist stores on a street (e.g. baker, butcher). This paper measures the pricing incentives of large supermarkets by considering the role of multistore shopping, shopping costs, and pricing cross-effects between product categories. We estimate a discrete/continuous model in which c...
متن کاملConsumer Behaviour , Feedback Information and the Supermarket Industry
The purpose of this thesis is threefold: First, to explain how learning shapes consumer behaviour over a comestible (experience) good. Second, to examine the role of feedback information and information aggregation for consumer choices and market performance in markets for experience goods. Third, to understand how firms react to heterogeneous consumer choices in the supermarket industry when f...
متن کامل