Do we go shopping downtown or in the ‘burbs?
Philip Ushchev (),
Igor Sloev and
Jacques Thisse ()
Journal of Urban Economics, 2015, vol. 85, issue C, 1-15
We combine spatial and monopolistic competition to study market interactions between downtown retailers and an outlying shopping mall. Consumers shop at either one marketplace or at both, and buy each variety in volume. The market solution stems from the interplay between the market expansion effect generated by consumers seeking more opportunities, and the competition effect. Firms’ profits increase (decrease) with the entry of local competitors when the former (latter) dominates. Downtown retailers vanish swiftly when the mall is large. A predatory but efficient mall need not be regulated, whereas the regulator must restrict the size of a mall accommodating downtown retailers.
Keywords: Shopping behavior; Retailers; Shopping mall; Spatial competition; Monopolistic competition (search for similar items in EconPapers)
JEL-codes: D43 L81 R10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:85:y:2015:i:c:p:1-15
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