Chain-store pricing and the structure of retail markets

Olczak, Matthew (2006). Chain-store pricing and the structure of retail markets. Working Paper. University of East Anglia, Norwich (UK).

Abstract

This paper investigates competition between chain-stores and independents in the UK opticians' industry, using the relationship between the number of outlets present in a local market and the market size. Chain-stores are shown to have a significant effect on local market competition. In addition, the empirical approach is extended to allow inferences on the nature and extent of product differentiation. The results are broadly consistent with a model of vertical product differentiation in which chain-stores adopt national pricing strategies. The evidence suggests that the nature of competition between independent retailers depends on whether a chain-store is present.

Publication DOI: https://doi.org/10.2139/ssrn.912173
Divisions: Aston Business School > Economics, Finance & Entrepreneurship
Uncontrolled Keywords: chain-stores,product differentiation,national pricing
Published Date: 2006-04
Authors: Olczak, Matthew ( 0000-0001-6808-3832)

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