Empirical Models of Manufacturer-Retailer Interaction: A Review and Agenda for Future Research

The nature of the interaction between manufacturers and retailers has received a great deal of empirical attention in the last 15 years. One major line of empirical research examines the balance of power between them and ranges from reduced form models quantifying aggregate profit and other related trends for manufacturers and retailers to structural models that test alternative forms of manufacturer-retailer pricing interaction. A second line of research addresses the sources of leverage for each party, e.g., trade promotions and their pass-through, customer information from loyalty programs, manufacturer advertising, productassortment in general, and private label assortment in particular. The purpose of this article is to synthesize what has been learnt about the nature of the interaction between manufacturers and retailers and the effectiveness of each party’s sources of leverage and to highlight gaps in our knowledge that future research should attempt to fill

The impact of retail mergers on food prices: evidence from France

This paper analyzes the impact of a merger in the French retail sector on food prices, using a consumer panel data. We perform a difference-in-differences analysis by comparing price changes in stores for which the local market structure is affected by the merger to unaffected stores. In addition, we empirically investigate economic forces behind the observed price changes. On average, we find that the merger significantly raised competitors' prices contemporaneously with merging firms' price increases. Further, we show that competitor prices increase more in local markets that experience larger structural changes in concentration and chain differentiation.Cet article analyse l’impact sur les prix des biens alimentaires d’une fusion dans le secteur de la distribution française à partir de données de consommation. Nous utilisons une analyse de différence en différences en comparant les changements de prix entre les magasins affectés dans leur structure de marché local et ceux pour qui la fusion ne change rien. De plus, nous étudions empiriquement les forces économiques à la source des changements de prix observés. En moyenne, nous trouvons que la fusion augmente significativement les prix des concurrents et nous observons conjointement une hausse des prix pour les firmes qui fusionnent. Enfin, nous montrons que les prix des concurrents augmentent d’autant plus que leur zone de chalandise fait face à d’importants changements structurels au niveau du degré de concentration et de la différenciation entre enseignes

The impact of retail mergers on food prices: evidence from France

This paper analyzes the impact of a merger in the French retail sector on food prices, using a consumer panel data. We perform a difference-in-differences analysis by comparing price changes in stores for which the local market structure is affected by the merger to unaffected stores. In addition, we empirically investigate economic forces behind the observed price changes. On average, we find that the merger significantly raised competitors' prices contemporaneously with merging firms' price increases. Further, we show that competitor prices increase more in local markets that experience larger structural changes in concentration and chain differentiation