Non, Marielle (2010): Isolation or joining a mall? On the location choice of competing shops.
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I study the location choice of competing shops. A shop can either be isolated or join a mall. A fraction of consumers is uninformed about prices and incurs costs to travel between market places and to enter a shop. The equilibrium mall size is computed for several parameter values, showing that mall and isolated shops can coexist. Several effects play a role. Mall shops attract more consumers, but isolated shops set a higher maximum price. Moreover, numerical evaluations show that an increase in mall size decreases the average price level and increases the participation level of uninformed consumers.
|Item Type:||MPRA Paper|
|Original Title:||Isolation or joining a mall? On the location choice of competing shops|
|Keywords:||location choice; travel costs; pricing; consumer search|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
|Depositing User:||Marielle C. Non|
|Date Deposited:||15. Jan 2010 14:06|
|Last Modified:||15. Feb 2013 23:08|
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