Opening Hours and Quality Choices

Yamada, Mai (2014): Opening Hours and Quality Choices.

Abstract

Using a duopoly model with symmetric retailers, we show that retailer strategies regarding opening hours and quality choices of goods vary depending on the cost structure of the quality investment in goods. In the case of the cost remaining constant regardless of the length of opening hours, a retailer with longer opening hours chooses higher quality and charges higher prices. Conversely, in the case of the cost increasing proportional to opening hours, a retailer with longer opening hours chooses lower quality and charges lower prices. The latter case is consistent with the behavior of retailers in Japan.

• Item Type: MPRA Paper
• Language: English
• Keywords: Duopoly; Opening hours; Multi-dimensional product differentiation
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R32 - Other Spatial Production and Pricing Analysis

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