Competition and Product Quality in the Supermarket Industry
AbstractThis article analyzes the effect of competition on a supermarket firm's incentive to provide product quality. In the supermarket industry, product availability is an important measure of quality. Using U.S. Consumer Price Index microdata to track inventory shortfalls, I find that stores facing more intense competition have fewer shortfalls. Competition from Walmart--the most significant shock to industry market structure in half a century--decreased shortfalls among large chains by about a third. The risk that customers will switch stores appears to provide competitors with a strong incentive to invest in product quality. Copyright 2011, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal The Quarterly Journal of Economics.
Volume (Year): 126 (2011)
Issue (Month): 3 ()
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- Emek Basker, 2012.
"Raising the Barcode Scanner: Technology and Productivity in the Retail Sector,"
American Economic Journal: Applied Economics,
American Economic Association, vol. 4(3), pages 1-27, July.
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- Emek Basker, 2011. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," Working Papers 1101, Department of Economics, University of Missouri, revised 28 May 2011.
- Itai Ater & Eugene Orlov, 2013. "The Effect of the Internet on Performance and Quality: Evidence from the Airline Industry," Working Papers 13-07, NET Institute.
- Victor Manuel Bennett & Lamar Pierce & Jason A. Snyder & Michael W. Toffel, 2012. "Competition and Illicit Quality," Harvard Business School Working Papers 12-071, Harvard Business School, revised May 2012.
- Emek Basker, 2013. "Change at the Checkout: Tracing the Impact of a Process Innovation," Working Papers 1302, Department of Economics, University of Missouri.
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