| This dissertation contains three essays studying several important issues on retail management. Essay 1 examines the effect of a retailing management change on retail price and sales in a large retailing store, which in recent years has switched many of its product categories from the retailer-managed to the manufacturer-managed system. I find that this change caused overall retail prices to decrease. However, there was significant heterogeneity in the response across brands. For the cell phone category that we study, brands with a high market share, inelastic demand and low demand variability have not changed prices. For another watch category, retail prices of low- and medium-tier brands have decreased, yet prices of high-tier brands have increased by 16 percent after the change. In addition to sales increases due to lower prices we find that the management change further causes the sales to increase by 9 - 10 percent for the cell phone category and 11 - 17 percent for the watch category, perhaps indicating an increased investment in selling effort from manufacturers. In the essay 2, I demonstrate some important new findings on how compensation systems impact peer effects by changing worker incentives to help and compete with peers within and across firms. First, high-ability workers improve peer productivity under team-based compensation while hurting peers under individual-based compensation. Second, I document peer effects across firm boundaries that also depend on compensation. Third, I find that compensation systems influence workers' strategic price discounting and customer focus in response to peers. My results suggest that heterogeneity in worker ability enhances team performance under team-based compensation while hurting individual-based firms. The essay 3 studies the impact of peers on coworker learning in a retail setting. Using four years of individual cosmetic sales data from a Chinese department store, I incorporate peer-based learning into a model with learning-by-doing and forgetting. I observe peer-based learning both within and across firm boundaries, identifying that the relative ability of coworkers impacts the learning rate of a salesperson. Using two sales tasks of different difficulty, I observe evidence consistent with the presence of both active teaching and learning through observation. This study shows that the inter-organizational knowledge spillovers observed in past studies have micro-foundations in the individual employees. |
