Multi-Product Competition , Shopping Costs , and Market Power : A Model of Supermarket Pricing ∗

@inproceedings{Smith2015MultiProductC,
  title={Multi-Product Competition , Shopping Costs , and Market Power : A Model of Supermarket Pricing ∗},
  author={Howard Smith and \Oyvind Thomassen},
  year={2015}
}
A supermarket brings together product cateogories (e.g. bread, meat) that traditionally are sold separately in specialist stores on a street (e.g. baker, butcher). This paper measures the pricing incentives of large supermarkets by considering the role of multistore shopping, shopping costs, and pricing cross-effects between product categories. We estimate a discrete/continuous model in which consumers have demands for multiple categories and can buy from more than one store (incurring shopping… CONTINUE READING