Consumer Search and Automobile Dealer Colocation

• 成果类型: Article
• 署名作者: Murry, Charles; Zhou, Yiyi
• 署名单位: Boston College; State University of New York (SUNY) System; Stony Brook University; State University of New York (SUNY) System; Stony Brook University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3307
• 发表日期: 2020
• 页码: 1909-1934
• 关键词: car dealers; retail exit; agglomeration

摘要

Retailers colocate with rivals to take advantage of economies of agglomeration even though colocation implies greater competition. Using data on all new car transactions registered in Ohio from 2007 to 2014, we estimate a structural model of consumer search for spatially differentiated products that explicitly captures the agglomeration and competition effects of retail colocation. Search frictions generate an average of $333 per car in dealer markups. Agglomeration implies that dealer closures could harm incumbent colocated dealers, even though the incumbent dealers would face less competition. Our results inform the recent policy debate surrounding the massive downsizing of car retail networks and highlight the role of contagion in brick-and-mortar retailing.