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Economic impact of category captaincy: an examination of assortments and prices

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  • Viswanathan, Madhu
  • Narasimhan, Om
  • John, George

Abstract

We empirically investigate the impact of category captaincy, an arrangement where the retailer works exclusively with a manufacturer to manage both the manufacturer’s and his rivals’ products. Using a unique data set that contains information on category captaincy as well as SKU-store-level sales and price across 24 retail chains and eight local markets in the United States for a frozen food category, we quantify the impact of captaincy on prices, assortments, profits, and consumer welfare. Interestingly, our estimates suggest that captaincy can lead to welfare gains for consumers, which argues against a purely negative view of captaincy by policy makers.

Suggested Citation

  • Viswanathan, Madhu & Narasimhan, Om & John, George, 2020. "Economic impact of category captaincy: an examination of assortments and prices," LSE Research Online Documents on Economics 107034, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:107034
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    File URL: http://eprints.lse.ac.uk/107034/
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    References listed on IDEAS

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    1. Bowen Luo, 2024. "Manufacturer–Retailer Relationships and the Distribution of New Products," Marketing Science, INFORMS, vol. 43(1), pages 114-137, January.
    2. repec:ags:aaea22:343858 is not listed on IDEAS

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    More about this item

    Keywords

    moment inequalities; category management; structural models; retail; category captaincy;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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