Variety and the cost of search in supermarket retailing

Timothy J. Richards, Koichi Yonezawa and Stephen Hamilton

No 182778, 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists

Abstract: It is generally not optimal for consumers to become perfectly informed about all prices and all available products in a multi-product retail environment when search is costly. We examine the link between the cost of search and product variety o¤ered by multi-product retailers. Using a hierarchical model in which consumers search among stores and then among brands, we nd statistically signi cant costs both for search among stores and for brands within a store. We also nd that the costs of search rise with variety, suggesting that retailers may improve their market power by increasing assortment depth.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 37
Date: 2014-08
New Economics Papers: this item is included in nep-com and nep-mkt
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Journal Article: Variety and the Cost of Search in Supermarket Retailing (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae14:182778

DOI: 10.22004/ag.econ.182778

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