Understanding the determinants of consumer grocery stockpiling behavior.

Grocery stockpiling is a common behavioral response to the emergence of disasters or heightened uncertainty. Nonetheless, the phenomenon and methods for mitigating it are not well understood. Using a model of household shopping and inventory management, we conceptualize stockpiling as a result of an increase in the fixed cost of making grocery shopping trips, or the opportunity cost of time associated with shopping. In a laboratory experiment, we find that stockpiling increases (decreases) by 78 and 41% (22%) with an increase in fixed costs and price reductions (imposition of purchase limits), respectively. We also find that stockpiling leads to fewer (more) grocery trips by 33 and 22% (36%) under the same three conditions, respectively. Our experiment and subsequent cluster analysis suggest that loss aversion suppresses stockpiling. Our experiment shows that imposing purchase limits, a common retail response to stock‐outs, can trigger stockpiling during shopping trips without purchase limits. Although we do not claim external validity, our study suggests that store managers and policymakers should be careful about solutions during a stockpiling event, such that they do not exacerbate stockpiling, which may disproportionately affect vulnerable groups and disrupt supply chains. [ABSTRACT FROM AUTHOR]