This dissertation studies how information and pricing rules shape competition in retail markets. Retail markets are often analyzed as local markets in which consumers compare nearby stores and firms set prices market by market. This is a useful benchmark, but it can miss two important features of retailing. First, consumers do not usually observe or remember all prices before deciding where to shop. Second, many retail chains set prices centrally and apply them uniformly across several markets. The three chapters of the dissertation study how these two features affect prices, consumer surplus, merger analysis, and merger remedies.Chapter 1 studies price advertising by a multiproduct retailer when consumers have imperfect information. The model considers a monopolist selling two goods. Consumers have homogeneous valuations for one good and heterogeneous valuations for the other. Before visiting the store, they observe at most one advertised price and form rational expectations about the unadvertised price. The chapter shows that the retailer faces a trade-off. Advertising the good with homogeneous valuations is effective at attracting consumers, because all consumers value that good. Advertising the good with heterogeneous valuations is less effective as a demand-expansion tool, but it creates stronger complementarities because consumers attracted by this good also buy the other product once in the store. When shopping costs are high enough, the complementarity effect can dominate, and the retailer prefers advertising the heterogeneous good. This strategy can also benefit consumers because it induces the retailer to commit to a low advertised price.Chapter 2 studies how uniform pricing affects retail merger simulations. The chapter develops an empirical framework in which local and uniform pricers coexist, and applies it to the U.S. yogurt market using scanner and consumer panel data. The results show that uniform pricing changes both the level and the distribution of prices. In the application, switching uniform-pricing retailers to local pricing lowers average prices, especially in poorer markets. The chapter then studies a merger between two uniform-pricing retailers. Uniform pricing attenuates the price increase in markets where both merging firms are active, but it spreads price increases to markets where only one merging firm is present. In the empirical application, this spread effect dominates, so aggregate consumer-surplus losses are larger under the observed mixed-pricing regime than under an all-local pricing benchmark. Uniform pricing also weakens the pass-through of local efficiencies, making it harder for such efficiencies to offset merger harm.Chapter 3 studies how uniform pricing affects merger remedies. Under local pricing, a divestiture is naturally evaluated as a local correction: it restores competition where the merger weakens rivalry. Under uniform pricing, a divestiture changes the merged firm’s pricing incentives across a broader footprint. Using the same empirical setting, the chapter simulates mergers and county-level divestitures under local and uniform pricing. The results show that uniform pricing changes the geography of both merger harm and remedy effects. The best divestitures under uniform pricing are often not the same as under local pricing. They tend to target counties that matter most for the firm’s common-pricing problem, rather than only counties where local competitive harm is largest. Moreover, under uniform pricing, a divestiture can improve aggregate consumer surplus while harming consumers in the county where the assets are sold.Overall, the dissertation shows that retail pricing should not always be analyzed as a collection of independent local decisions. Information constraints link products within stores, and uniform pricing links markets across space. Taking these links into account can change the evaluation of information policies, mergers, and merger remedies.
