PRICE OR VARIETY? AN EVALUATION OF MERGERS EFFECTS IN GROCERY RETAILING

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• Tomaso Duso, Head of the Firms and Markets Department, DIW Berlin
• Wednesday 30 October 2019, 13:30-14:30
• LT4, Cambridge Judge Business School.

If you have a question about this talk, please contact Emily Brown.

Ahead of the seminar a light lunch will be available outside LT4 from 13:00

We study the effect of a merger between two Dutch supermarket chains to assess whether assortment decisions are key strategic instruments for firms responding to local market conditions. We adopt a difference in differences strategy that exploits local variation in the merger’s effects. We show that the merger did not affect prices but it led the merging parties to reposition their assortment to avoid cannibalisation. While the low variety target’s stores reduced the depth of their assortment when in direct competition with the acquirer, the latter increased their assortment. A simple theoretical model of variety competition explains most of our findings.

This talk is part of the Economics & Policy Seminars, CJBS series.

This talk is included in these lists:

• Economics & Policy Seminars, CJBS
• LT4, Cambridge Judge Business School

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