Liberalization of Opening Hours with Free Entry

Tobias Wenzel

No 13, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper studies competition in prices and opening hours in a model with free entry. It is shown that under free competition a market failure arises: Entry is excessive and opening hours are under-provided. Restrictions on opening hours aggravate this failure. I analyze the impact of a liberalization of opening hours. The model predicts that in the short run prices will remain constant, but increase in the long run. Concentration in the retail sector will rise and opening hours will increase in two steps, immediately after deregulation and further over time. Finally, employment in the retail sector increases.

Keywords: Opening hours; retailing; deregulation (search for similar items in EconPapers)
JEL-codes: L13 L51 L81 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:13

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