MARKET SIZE MATTERS

Warning: is_dir(): open_basedir restriction in effect. File(/libraries) is not within the allowed path(s): (/home/web1050:/usr/share/php) in libraries_get_libraries() (line 176 of /home/web1050/public_html/sites/all/modules/contrib/libraries/libraries.module).

This paper characterizes the effects of market size on the size distribution of establishments for thirteen retail trade industries across 225 U.S. cities. In most industries we examine, establishments are larger in larger cities. Models of large-group competition in which markups fall after adding competitors can reproduce this observation.