Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92486
Authors: 
Matsa, David
Year of Publication: 
2009
Series/Report no.: 
CSIO Working Paper 0103
Abstract: 
This paper analyzes the effect of competition on a supermarket firm's incentive to provide product quality. In the supermarket industry, product availability is an important measure of quality. Using U.S. consumer price index microdata to track inventory shortfalls, I find that stores facing more intense competition have fewer shortfalls. Competition from Wal-Mart - the most significant shock to industry market structure in half a century - decreased shortfalls by up to 24 percent. The risk that customers will switch stores appears to provide competitors with a strong incentive to invest in product quality.
Subjects: 
product quality
competition
monopoly
big-box
inventory management
stockout
JEL: 
D40
G31
L15
L81
Document Type: 
Working Paper

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