Do we go shopping downtown or in the ‘burbs’? Why not both?

Philip Ushchev, Igor Sloev, Jacques Thisse and ,

No 2013057, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We combine spatial and monopolistic competition to study market interactions between downtown retailers and an outlying shopping mall. Consumers shop at either 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 swiftly vanish 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)
Date: 2013-11-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Do we go shopping downtown or in the 'burbs? Why not both? (2014)
Working Paper: Do we go shopping downtown or in the `burbs? Why not both? (2013)
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