« New Ideas for Limiting Bank Size - Murphy Conference on Corporate Law, Fordham Law School, March 12, 2010 | Main | How Do Firms Exercise Unilateral Market Power? Evidence from a Bid-Based Wholesale Electricity Market »
March 2, 2010
Retailer Choice and Loyalty Schemes - Evidence from Sweden
Posted by D. Daniel Sokol
Johan Lundberg (Department of Economics, Umeå University) and Sophia Lundberg, (Department of Economics, Umeå University) provide Retailer Choice and Loyalty Schemes - Evidence from Sweden.
ABSTRACT: From economic theory, it is known that consumer loyalty schemes can have lock-in effects resulting in entry barriers and higher prices. This paper concerns consumer loyalty schemes where the main issue is to test the hypothesis that loyalty scheme membership affects the choice of food retailer. This choice is modeled as a random utility maximization problem estimated with maximum likelihood. Based on a data set covering 1,551 Swedish households, we find evidence supporting this hypothesis. Further, according to the results, store characteristics and geographical distance matter for the choice of retailer while household characteristics are not found to have a significant effect.
March 2, 2010 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Retailer Choice and Loyalty Schemes - Evidence from Sweden: