This Small Grant for Exploratory Research award funds data acquisition for a study of supermarket competition. The PI will use this data to conduct work on how multi-store chains compete in geographic markets. The model will include the possibility that chains make strategic choices about store locations.
In the US, many retail industries have become dominated by strong regional or even national chains. This project will focus on better understanding the nature of competition in this kind of industry. Analyzing both the spatial and dynamic aspects of competitions will significantly enhance our understanding of how firms compete.
The result will be a model that can be applied to a wide variety of retail industries. Investment in variety enhancing distributions systems plays a central role in the markets for consumer electronics, home furnishings, building supplies, video rentals, and many other consumer durables. Understanding how these investments impact competition will help guide effective merger policy in these industries.
