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Delivery in the city: evidence on monopolistic competition from New York restaurants

Jacob Cosman and Nathan Schiff

MPRA Paper from University Library of Munich, Germany

Abstract: We examine the response to entry in a large market with differentiated products using a novel longitudinal dataset of over 550,000 New York City restaurant menus from 68 consecutive weeks. We compare “treated” restaurants facing a nearby entrant to “control” restaurants with no new competition, matching restaurants using location characteristics and a pairwise distance measure based on menu text. Restaurants frequently adjust prices and product offerings, but we find no evidence that they respond differentially to new competition. However, restaurants in the top entry decile are 5% more likely to exit after a year than restaurants in the lowest entry decile.

Keywords: spatial competition; monopolistic competition; product differentiation; entry (search for similar items in EconPapers)
JEL-codes: D22 D43 L13 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96617

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