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Does Sutton apply to supermarkets?
Open accessAbstract
I present empirical evidence that endogenous fixed costs play a central role in determining the equilibrium structure of the supermarket industry. Using the framework developed in Sutton (1991), I construct a model of supermarket competition where escalating investment infirm‐level distribution systems is driven by the incentive to produce a greater variety of products in every store. Employing a store‐level census and 51 distinct geographic markets, I demonstrate that the supermarket industry is a natural oligopoly in which a small number of firms (between four and six)capture the majority of sales, regardless of market size.
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Citations
Cited by
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Francis, J. R., Michas, P. N., & Seavey, S. E. (2013) · Contemporary Accounting Research · doi:10.1111/j.1911-3846.2012.01156.x · Cited by 322
COVID‐19 impact on fruit and vegetable markets
Richards, T. J., & Rickard, B. (2020) · Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie · doi:10.1111/cjag.12231 · Cited by 314
Adolescence and the Path to Maturity in Global Retail
Bronnenberg, B. J., & Ellickson, P. B. (2015) · Journal of Economic Perspectives · doi:10.1257/jep.29.4.113 · Cited by 71
Self-citation
Metadata
- Authors
- Ellickson, P. B.
- Venue
- The RAND Journal of Economics
- Publisher
- Wiley
- Published
- 2007-03
- Volume
- 38
- Issue
- 1
- Pages
- 43-59
- ISSN
- 0741-6261 (ISSN-L)
- 1756-2171
- OpenAlex
- W2005469898
- Cited by
- 207
- References
- 0
- FWCI
- 27.44
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.