TY  - JOUR
AU  - Ziegler,Alexandre
AU  - Lazear,Edward P.
TI  - The Dominance of Retail Stores
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9795
PY  - 2003
Y2  - June 2003
UR  - http://www.nber.org/papers/w9795
L1  - http://www.nber.org/papers/w9795.pdf
N1  - Author contact info:
Edward P. Lazear
Graduate School of Business
Stanford University
Stanford, CA 94305
Tel: 650/723-9136
Fax: 650/723-0498
E-Mail: lazear@stanford.edu
AB  - Most items are sold to consumers by retail stores. Stores have two features that distinguish them from auctions. First, the price is posted and a consumer who values the good at more than the posted price is sold the good. Second, the sale takes place as soon as the consumer decides to buy. In contrast, auctions have prices that are determined ex post and the potential consumer must wait until the auction is held to buy the good. Consequently, auctions result in  false trading', where buyers sometimes pass up other valuable opportunities while waiting for the auction to occur or instead make undesired duplicate purchases. Retail stores dominate auctions when the good is perishable and/or becomes obsolete quickly, when the market is thin, and when close substitutes for the good are plentiful. These predictions are consistent with a number of observed phenomena.
ER  -