Multiproduct retailing and consumer shopping behavior: The role of shopping costs

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. © 2019 Elsevier B.V.

• Fecha de publicación: 2020
• Institución: Universidad del Rosario
• Repositorio: Repositorio EdocUR - U. Rosario
• Idioma: eng
• OAI Identifier: oai:repository.urosario.edu.co:10336/22125
• Acceso en línea: https://doi.org/10.1016/j.ijindorg.2019.102560; https://repository.urosario.edu.co/handle/10336/22125
• Palabra clave: Consumer behavior; Cost benefit analysis; Profitability; Retail stores; Consumer shopping; Market Power; Multiple products; Multistop shopping; Own-price elasticities; Product delisting; Similar models; Transaction cost; Costs; Loss-leader pricing; Market power; Multistop shopping; Product delisting; Shopping costs; Supermarket competition
• License: Abierto (Texto Completo)