Empirical Analysis of Competition between Wal-Mart and Other Retail Channels
Journal of Economics and Management Strategy, Forthcoming
50 Pages Posted: 3 Sep 2008
Date Written: January 2008
This paper quantifies the degree of competition among Wal-Mart and different retail channels by exploiting a unique dataset that describes a consumer's choice of store. Using a discrete choice model, I estimate a consumer's choice of retailer in the sales market for DVDs among online, mass merchant, electronics, video specialty, and music stores. Wal-Mart competes more intensely with other mass merchants, and conditional on price and distance, the average consumer still prefers Wal-Mart over most other stores. I also consider a counterfactual experiment regarding the entry of Wal-Mart into 15 proposed store sites in California.
Keywords: discrete choice, retail, Wal-Mart, cross-channel competition
JEL Classification: C25, L81
Suggested Citation: Suggested Citation