2 Citations (Scopus)

Abstract

We examine search costs and product variety among multi-product retailers. Search costs may rise in variety, because consumers have more alternatives to consider, but may fall on the margin as product variety allows better matches between consumers and brands. We estimate a hierarchical model that disentangles the effect of variety on brand and store search costs. Our findings reveal that search costs within each store rise in product variety, suggesting that retailers reduce consumer search by offering deeper product assortments. But, the cost of searching among stores falls in product variety, which limits the exercise of market power.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalReview of Industrial Organization
DOIs
StateAccepted/In press - Jul 12 2016

Fingerprint

Costs
Search costs
Supermarkets
Product variety
Retailing
Retailers
Hierarchical model
Exercise
Product assortment
Margin
Consumer search
Market power

Keywords

  • Attribute search
  • Consumer search
  • Market power
  • Retail prices
  • Variety

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management of Technology and Innovation
  • Strategy and Management
  • Organizational Behavior and Human Resource Management

Cite this

Variety and the Cost of Search in Supermarket Retailing. / Richards, Timothy; Hamilton, Stephen F.; Yonezawa, Koichi.

In: Review of Industrial Organization, 12.07.2016, p. 1-23.

Research output: Contribution to journalArticle

Richards, Timothy ; Hamilton, Stephen F. ; Yonezawa, Koichi. / Variety and the Cost of Search in Supermarket Retailing. In: Review of Industrial Organization. 2016 ; pp. 1-23.
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