Sorry, We Don't Carry That Here

Linda Bui and James Dana

No 114, Working Papers from Brandeis University, Department of Economics and International Business School

Abstract: Retailers vary considerably in many dimensions, including the variety and selection of the products that they offer. In this paper we argue that the availability of energy-efficient products in retailers is shaped by market forces that often favor horizontal characteristics like convenience or geographic variety over vertical characteristics like product variety and energy efficiency. Specifically, we find evidence that stores carrying more energy-efficient products are located in neighborhoods in which consumers have low travel costs and care relatively more about product selection than convenience. The paper is one of the first to describe this equilibrium trade off between vertical and horizontal product differentiation and to find empirical evidence that supports it.

Pages: 39 pages
Date: 2017-09
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http://www.brandeis.edu/economics/RePEc/brd/doc/Brandeis_WP114.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:brd:wpaper:114

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