Does Amazon Exercise Its Market Power? Evidence from Toys“R”Us

Leshui He, Imke Reimers and Benjamin Shiller

Journal of Law and Economics, 2022, vol. 65, issue 4, 665 - 685

Abstract: Since its founding, Amazon has established a reputation for being consumer friendly by consistently offering lower prices than its market position would seem to allow. However, recent antitrust concerns about dominant online platforms have revived questions about whether Amazon’s growing market share threatens consumer welfare. Given its reputation, regulators have proposed a new focus on conduct unrelated to prices. We ask whether such a move is premature. Using the sudden and unanticipated US exit of Toys“R”Us as a natural experiment, we find that Amazon’s toy prices on its US site increased by almost 5 percent in the wake of the exit relative to similar products and to toys on its Canadian site. Thus, despite Amazon’s long-standing reputation, it may exploit increases in market power in traditional ways as competing retailers cease operating.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1086/720824 (application/pdf)
http://dx.doi.org/10.1086/720824 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/720824

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().