Most likely retail agglomeration patterns: Potential maximization and stochastic stability of spatial equilibria

Minoru Osawa, Takashi Akamatsu and Yosuke Kogure

Papers from arXiv.org

Abstract: We study a model of retail agglomeration where consumers are more likely to visit zones with a higher concentration of shops. This agglomerative effect makes zones with many retailers more attractive. The spatial distribution of retailers in equilibrium is endogenously determined in response to the spatial pattern of shopping demand. In such a setting, multiple locally stable equilibria may arise, and the outcome can depend on the initial distribution of shops. To address this issue, we apply an approach from evolutionary game theory, selecting the equilibrium that maximizes a potential function representing the incentives of retailers. We demonstrate the method in a two-dimensional spatial setting. Compared to local stability based on gradual, myopic adjustments, this global maximization leads to a unique and more robust prediction. As expected, the number of retail clusters decreases either when shopping costs for immobile consumers fall or when the attractiveness of larger retail concentrations increases.

Date: 2020-11, Revised 2025-08
New Economics Papers: this item is included in nep-geo, nep-gth and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://arxiv.org/pdf/2011.06778 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2011.06778

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().