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Multiproduct retailing and consumer shopping behavior: The role of shopping costs

Florez-Acosta, Jorge; Herrera Araujo, Daniel (2020), Multiproduct retailing and consumer shopping behavior: The role of shopping costs, International Journal of Industrial Organization, 68. 10.1016/j.ijindorg.2019.102560

Type
Article accepté pour publication ou publié
Date
2020-01
Nom de la revue
International Journal of Industrial Organization
Volume
68
Éditeur
Elsevier
Identifiant publication
10.1016/j.ijindorg.2019.102560
Métadonnées
Afficher la notice complète
Auteur(s)
Florez-Acosta, Jorge
Universidad del Rosario
Herrera Araujo, Daniel
Laboratoire d'Economie de Dauphine [LEDa]
Institut de Recherche pour le Développement (IRD)
Résumé (EN)
We empirically examine the role of shopping costs in consumer shopping behavior in a context of competing differentiated supermarkets that supply similar product lines. We develop and estimate a model of demand in which consumers can purchase multiple products from multiple stores in the same week, and incur transaction costs of dealing with supermarkets. We show that a similar model without shopping costs predicts a larger proportion of multistop shoppers and overestimates own-price elasticities and product markups. Further, we use our model along with a model of competition between supermarkets to study two practices that are commonly used by supermarkets: product delisting and loss-leader pricing. We show that the presence of shopping costs makes product delisting less profitable whereas it makes loss-leader pricing more profitable compared to a context in which consumers do not incur shopping costs.
Mots-clés
Supermarket competition; market power; multistop shopping; shopping costs; product delisting; loss-leader pricing
JEL
L13 - Oligopoly and Other Imperfect Markets
L81 - Retail and Wholesale Trade; e-Commerce
D12 - Consumer Economics: Empirical Analysis

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