Competition and Product Quality in the Supermarket Industry
This 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.
Volume (Year): 126 (2011)
Issue (Month): 3 ()
|Contact details of provider:|| |
When requesting a correction, please mention this item's handle: RePEc:oup:qjecon:v:126:y:2011:i:3:p:1539-1591. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.