 Multiproduct retailing and consumer shopping behavior: The role of shopping costsJorge Florez-Acosta and Daniel Herrera-Araujo Post-Print from HAL Abstract: We empirically examine the role of shopping costs in consumer shopping behavior in a context of competing differentiated supermarkets that supply similar product lines. We develop and estimate a model of demand in which consumers can purchase multiple products from multiple stores in the same week, and incur transaction costs of dealing with supermarkets. We show that a similar model without shopping costs predicts a larger proportion of multistop shoppers and overestimates own-price elasticities and product markups. Further, we use our model along with a model of competition between supermarkets to study two practices that are commonly used by supermarkets: product delisting and loss-leader pricing. We show that the presence of shopping costs makes product delisting less profitable whereas it makes loss-leader pricing more profitable compared to a context in which consumers do not incur shopping costs. Keywords: Supermarket competition; market power; multistop shopping; shopping costs; product delisting; loss-leader pricing (search for similar items in EconPapers) Published in International Journal of Industrial Organization, 2020, 68, ⟨10.1016/j.ijindorg.2019.102560⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02455135 DOI: 10.1016/j.ijindorg.2019.102560 Access Statistics for this paper More papers in Post-Print from HAL |
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