Is Wal-Mart Good for Competition? Evidence from Milk Prices

Rebecca Cleary () and Rigoberto Lopez

No 149207, Research Reports from University of Connecticut, Food Marketing Policy Center

Abstract: This article examines the impact of Wal-Mart Supercenters’ entry on incumbents’ pricing behavior and demand. Using a structural model and milk data from the Dallas/Fort Worth supermarket chains, empirical results show that an expansion of Supercenters caused incumbents to price milk significantly more competitively, dropping on average 22.5% between 1996 and 2002, in spite of declines in their milk demand. Furthermore, consumer gains exceeded incumbent losses, lending further support to the notion that Wal-Mart is good for competition and consumers.

Keywords: Marketing (search for similar items in EconPapers)
Pages: 27
Date: 2007-10
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uconnr:149207

DOI: 10.22004/ag.econ.149207

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