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International trade and retailing

  • Eckel, Carsten

The New Trade Theory predicts that international trade lowers prices for consumers and expands the choices available to them. This study shows that both predictions may no longer hold once adjustments in the retail sector are taken into account. I present a new model of retailing in general equilibrium and explore its implications for a number of different shocks. The results demonstrate that retail assortments may remain constant if consumers have a low preference for diversity, and that consumer prices can even rise if the retail density is sufficiently low.

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Paper provided by Bamberg University, Bamberg Economic Research Group in its series BERG Working Paper Series with number 63.

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Date of creation: 2009
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Handle: RePEc:zbw:bamber:63
Contact details of provider: Postal: D-96045 Bamberg
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