Chain-store Pricing and the Structure of Retail Markets

Matthew Olczak
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Matthew Olczak: Centre for Competition Policy and School of Economics, University of East Anglia

No 2006-07, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: This paper investigates competition between chain-stores and independents in the UK opticians' industry, using the relationship between the number of outlets present in a local market and the market size. Chain-stores are shown to have a significant effect on local market competition. In addition, the empirical approach is extended to allow inferences on the nature and extent of product differentiation. The results are broadly consistent with a model of vertical product differentiation in which chain-stores adopt national pricing strategies. The evidence suggests that the nature of competition between independent retailers depends on whether a chain-store is present.

Keywords: Chain-stores; Product Differentiation; National Pricing (search for similar items in EconPapers)
JEL-codes: L11 L13 L84 (search for similar items in EconPapers)
Date: 2006-04-02
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2006_07

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