Opening Hours, Store Quality, and Social Welfare

Yamada, Mai (2014): Opening Hours, Store Quality, and Social Welfare.

Abstract

This paper examines opening hours, store quality, and price decisions by retailers. We consider a scenario in which the investment in store quality is more costly for longer opening hours. This scenario is suitable for a case where a retailer invests in the brand proliferation in order to attract consumers. This is because longer opening hours cause additional wages and administrative costs in order to handle the brand proliferation. We show that a retailer with shorter opening hours chooses higher brand proliferation and charges lower prices. We also examine the impact of deregulated opening hours on social welfare. We find that the liberalization on opening hours is desirable in view of social welfare.

• Item Type: MPRA Paper
• Language: English
• Keywords: Duopoly; Opening hours; Multi-dimensional product differentiation, Social Welfare
• 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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