Effects of Product Availability: Experimental Evidence

42 Pages Posted: 1 Nov 2010 Last revised: 7 Feb 2021

See all articles by Christopher T. Conlon

Christopher T. Conlon

Columbia University

Julie H. Mortimer

Boston College; National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2010

Abstract

Product availability impacts many industries such as transportation, events, and retail, yet little empirical evidence documents the importance of stocking decisions for firm profits, vertical relationships, or consumers. We conduct several experiments, exogenously removing top-selling products from a set of vending machines and analyzing substitution patterns and profit impacts of the changed product availability using nonparametric analyses and structural demand estimation. We find substantial switching to alternate products, and evidence of misaligned incentives between upstream and downstream firms in the choice of which products to carry. We discuss the trade-offs of both empirical approaches for analyzing product availability effects generally.

Suggested Citation

Conlon, Christopher T. and Mortimer, Julie H., Effects of Product Availability: Experimental Evidence (October 2010). NBER Working Paper No. w16506, Available at SSRN: https://ssrn.com/abstract=1699606

Christopher T. Conlon (Contact Author)

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Julie H. Mortimer

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