Multi-Category Competition and Market Power: A Model of Supermarket Pricing

• 成果类型: Article
• 署名作者: Thomassen, Oyvind; Smith, Howard; Seiler, Stephan; Schiraldi, Pasquale
• 署名单位: Seoul National University (SNU); University of Oxford; Centre for Economic Policy Research - UK; Stanford University; University of London; London School Economics & Political Science
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20160055
• 发表日期: 2017
• 页码: 2308-2351
• 关键词: consumer demand; retail markets; mergers; CHOICE; differentiation; manufacturers; compatibility; CONTRACTS; inference; systems

摘要

In many competitive settings, consumers buy multiple product categories, and some prefer to use a single firm, generating complementary cross-category price effects. To study pricing in supermarkets, an organizational form where these effects are internalized, we develop a multi-category, multi-seller demand model and estimate it using UK consumer data. This class of model is used widely in theoretical analysis of retail pricing. We quantify cross-category pricing effects and find that internalizing them substantially reduces market power. We find that consumers inclined to one-stop (rather than multi-stop) shopping have a greater pro-competitive impact because they generate relatively large cross-category effects. (JEL D12, L11, L13, L81)