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PRODUCT VARIETY AND COMPETITION IN THE RETAIL MARKET FOR EYEGLASSES -super-

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  • RANDAL WATSON

Abstract

ABSTRACT I use original data on eyewear retailers in a cross-section of U.S. markets to study how firms' product range choices vary with the degree of local competition. Market level regressions show average per firm variety declining in the number of rivals. In regressions at the firm level, taking account of spatial differentiation within each market, a non-monotonic relationship between product ranges and competition is apparent. As the number of nearby rivals increases, per firm variety may first rise before eventually declining. Explanations for this pattern are offered, in terms of a tradeoff between business stealing and clustering effects. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

Suggested Citation

  • Randal Watson, 2009. "PRODUCT VARIETY AND COMPETITION IN THE RETAIL MARKET FOR EYEGLASSES -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 57(2), pages 217-251, June.
  • Handle: RePEc:bla:jindec:v:57:y:2009:i:2:p:217-251
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    Cited by:

    1. Elena Argentesi & Paolo Buccirossi & Roberto Cervone & Tomaso Duso & Alessia Marrazzo, 2018. "Price or Variety? An Evaluation of Mergers Effects in Grocery Retailing," Discussion Papers of DIW Berlin 1734, DIW Berlin, German Institute for Economic Research.
    2. Lijesen, M.G., 2010. "Empirical applications of spatial competition; an interpretative literature review," Serie Research Memoranda 0006, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Ying Fan, 2013. "Ownership Consolidation and Product Characteristics: A Study of the US Daily Newspaper Market," American Economic Review, American Economic Association, vol. 103(5), pages 1598-1628, August.
    4. repec:kap:jincot:v:18:y:2018:i:1:d:10.1007_s10842-017-0251-6 is not listed on IDEAS
    5. Argentesi, Elena & Buccirossi, Paolo & Cervone, Roberto & Duso, Tomaso & Marrazzo, Alessia, 2016. "The effect of retail mergers on prices and variety: An ex-post evaluation," DICE Discussion Papers 225, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Chrysovalantou Milliou & Joel Sandonis, 2018. "Manufacturer Mergers and Product Variety in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 1-24, March.
    7. Liran Einav, 2010. "Not All Rivals Look Alike: Estimating An Equilibrium Model Of The Release Date Timing Game," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 369-390, April.
    8. Elena Argentesi & Paolo Buccirossi & Roberto Cervone & Tomaso Duso & Alessia Marrazzo, 2018. "Price or Variety? An Evaluation of Mergers Effects in Grocery Retailing," CESifo Working Paper Series 7035, CESifo Group Munich.

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