Chain-store Pricing and the Structure of Retail Markets
AbstractThis 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.
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Bibliographic InfoPaper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 06-7.
Length: 36 pages
Date of creation: Apr 2006
Date of revision:
Chain-stores; product differentiation; national pricing;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
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