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Prices and Opening Hours in the Retail Sector: Welfare Effects of Restrictions on Opening Hours

Author

Listed:
  • J Rouwendal

    (Department of Economics and Management, Wageningen Agricultural University, PO Box 8060, 6700 DA Wageningen, and MuConsult, PO Box 2054, 3800 CB, Amersfoort, The Netherlands)

  • P Rietveld

    (Department of Spatial Economics, Vrije Universiteit, De Boelelaan 1105, PO Box 7161, 1007 MC Amsterdam, The Netherlands)

Abstract

In this paper a model for price and opening hours in the retail sector is developed. Demand is modelled in the discrete choice framework. General patterns of correlation between the random utilities of shopping at various times are allowed. First, the authors study a monopolist who has to determine price and opening times in order to maximise profits. The behaviour of this monopolist is then shown to be similar to that of a monopolistic competitor in a market with many suppliers. The effects of entry and exit are studied in relation to restrictions on opening hours in a market with many identical firms. It is shown that the welfare effects of upper limits on opening hours are negative when new firms enter the market.

Suggested Citation

  • J Rouwendal & P Rietveld, 1999. "Prices and Opening Hours in the Retail Sector: Welfare Effects of Restrictions on Opening Hours," Environment and Planning A, , vol. 31(11), pages 2003-2016, November.
    • Handle: RePEc:sae:envira:v:31:y:1999:i:11:p:2003-2016
    DOI: 10.1068/a312003
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    References listed on IDEAS

    as
    1. Morrison, Steven A & Newman, Robert J, 1983. "Hours of Operation Restrictions and Competition among Retail Firms," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 107-114, January.
    2. de Meza, David, 1984. "The Fourth Commandment: Is it Pareto Efficient?," Economic Journal, Royal Economic Society, vol. 94(374), pages 379-383, June.
    3. Tanguay, Georges & Vallee, Luc & Lanoie, Paul, 1995. "Shopping Hours and Price Levels in the Retailing Industry: A Theoretical and Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 516-524, July.
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    Cited by:

    1. Andre De Palma & Fay Dunkerley & Stef Proost, 2010. "Trip Chaining: Who Wins Who Loses?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 223-258, March.
    2. Neutens, Tijs & Delafontaine, Matthias & Schwanen, Tim & Weghe, Nico Van de, 2012. "The relationship between opening hours and accessibility of public service delivery," Journal of Transport Geography, Elsevier, vol. 25(C), pages 128-140.
    3. Shy, Oz & Stenbacka, Rune, 2006. "Service hours with asymmetric distributions of ideal service time," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 763-771, July.

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