The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment

• 成果类型: Article
• 署名作者: Busso, Matias; Galiani, Sebastian
• 署名单位: Inter-American Development Bank; University System of Maryland; University of Maryland College Park
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20150310
• 发表日期: 2019
• 页码: 33-56
• 关键词: wal-mart; entry; retail; MARKET; MODEL; destruction; services; creation; cheaper; IMPACT

摘要

This paper provides experimental evidence on the effect of increased competition on prices and quality in the retail sector. We randomized the entry of 61 firms into 72 markets serving the beneficiaries of a conditional cash transfer program in the Dominican Republic. Six months after the intervention, entry into the market led to reductions in prices ranging from 2 to 6 percent and to a statistically significant improvement in self-reported service quality. Prices dropped more in areas where the number of entrants was larger. Competition seems to have driven part of the clientele away from incumbent retailers.