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Market Size Matters

Author

Listed:
  • Jeffrey Campbell

    (University of Chicago)

Abstract

This paper characterizes the organization of the U.S. retail trade sector by comparing establishment sizes and numbers across cities with different populations. In most two digit retail trade industries, large cities have larger establishments but fewer establishments per capita than do small cities. These observations are inconsistent with free entry models where markups are independent of the number of producers. Models in which adding competitors reduces markups can reproduce these results.

Suggested Citation

  • Jeffrey Campbell, 2000. "Market Size Matters," Econometric Society World Congress 2000 Contributed Papers 1225, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1225
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    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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