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Spatial Competition in Private Labels

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  • Richards, Timothy J.
  • Hamilton, Stephen F.
  • Patterson, Paul M.

Abstract

Previous studies find that private labels increase retailers' bargaining power with manufacturers and allow retailers to price discriminate. We use a spatial discrete choice model to show that retailers also use store brands to create market power through store differentiation, but not as a means of building market share.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN with number 9840.

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Date of creation: 2007
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Handle: RePEc:ags:aaea07:9840

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Keywords: Marketing;

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References

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  3. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(3), pages 509-28, Fall.
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  6. Philippe Bontems & Sylvette Monier-Dilhan & Vincent Réquillart, 1999. "Strategic effects of private labels," Working Papers 156390, Institut National de la Recherche Agronomique, France.
  7. Pinkse, Joris & Slade, Margaret E., 1998. "Contracting in space: An application of spatial statistics to discrete-choice models," Journal of Econometrics, Elsevier, vol. 85(1), pages 125-154, July.
  8. J. Miguel Villas-Boas & Russell S. Winer, 1999. "Endogeneity in Brand Choice Models," Management Science, INFORMS, vol. 45(10), pages 1324-1338, October.
  9. Perloff, Jeffrey M & Salop, Steven, 1984. "Equilibrium with product differentiation," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4cq0m6s3, Department of Agricultural & Resource Economics, UC Berkeley.
  10. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-37, January.
  11. Robert Barsky & Mark Bergen & Shantanu Dutta & Daniel Levy, 2001. "What Can the Price Gap between Branded and Private Label Products Tell Us about Markups?," NBER Working Papers 8426, National Bureau of Economic Research, Inc.
  12. Cotterill, Ronald W. & Dhar, Tirtha Pratim, 2003. "Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel," Research Reports 25189, University of Connecticut, Food Marketing Policy Center.
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  17. Dobson, Paul W & Waterson, Michael, 1997. "Countervailing Power and Consumer Prices," Economic Journal, Royal Economic Society, vol. 107(441), pages 418-30, March.
  18. Sofia Berto Villas-Boas, 2007. "Vertical Relationships between Manufacturers and Retailers: Inference with Limited Data," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 625-652.
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  20. Feenstra, Robert C & Levinsohn, James A, 1995. "Estimating Markups and Market Conduct with Multidimensional Product Attributes," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 19-52, January.
  21. André Bonfrer & Pradeep K. Chintagunta, 2004. "Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?," Review of Industrial Organization, Springer, vol. 24(2), pages 195-218, 03.
  22. Villas-Boas, Sofia & Hellerstein, Rebecca, 2006. "Identification of supply models of retailer and manufacturer oligopoly pricing," Economics Letters, Elsevier, vol. 90(1), pages 132-140, January.
  23. Pradeep K. Chintagunta & André Bonfrer & Inseong Song, 2002. "Investigating the Effects of Store-Brand Introduction on Retailer Demand and Pricing Behavior," Management Science, INFORMS, vol. 48(10), pages 1242-1267, October.
  24. Frank Verboven, 1996. "International Price Discrimination in the European Car Market," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 240-268, Summer.
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  31. repec:cdl:agrebk:663536 is not listed on IDEAS
  32. Timothy J. Richards & Stephen F. Hamilton, 2006. "Rivalry in Price and Variety among Supermarket Retailers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 710-726.
  33. Mills, David E, 1999. "Private Labels and Manufacturer Counterstrategies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 125-45, June.
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Citations

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Cited by:
  1. Daniel Toro-Gonzalez & Jia Yan & R. Karina Gallardo & Jill J. McCluskey, 2013. "Estimation of Unobserved Attributes Using a Control Function Approach, Modeling the Demand for Mint Flavored Gum," Working Papers 2013-06, School of Economic Sciences, Washington State University.
  2. Ying, Xiongwei & Anders, Sven M., 2013. "Competition between Private Label and National Brand for Health-differentiated Food Product: A Canadian Retailing Case," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151280, Agricultural and Applied Economics Association.
  3. Geoffrey Pofahl, 2009. "Merger Simulation in the Presence of Large Choice Sets and Consumer Stockpiling: The Case of the Bottled Juice Industry," Review of Industrial Organization, Springer, vol. 34(3), pages 245-266, May.

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