Seminar – Price or Variety? An Evaluation of Mergers Effects in Grocery Retailing

Professor Tomaso Duso, DIW Berlin

This seminar looks at 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.

Speaker bio

Tomaso Duso is Head of the Firms and Markets Department at the Deutsches Institut für Wirtschaftsforschung (DIW Berlin), a professor of empirical industrial economics at the Technische Universität (TU) Berlin, and the spokesperson of the Berlin Centre for Consumer Policies (BCCP). He is also a Research Fellow for the CEPR and CESIfo.

His research interests are in applied econometrics in the fields of industrial organisation and management. In particular, his research focuses on the ex-post evaluation of competition policies and product market regulations. His papers have been published in The Review of Economics and Statistics, The Economic Journal, The Journal of Law and Economics, European Economic Review, and Journal of Management Studies amongst other academic journals.

Tomaso advised several public bodies, such as various DGs of the European Commission, the UK Competition Commission as well as Competition and Markets Authority, the Dutch Authority for Consumers and Markets, the OECD, and the European Bank for Reconstruction and Development on competition policy issues.