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Small, local and cheap? Walkable and car-oriented retail in competition

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  • Frederick Guy

    ()
    (Department of Management, Birkbeck College University of London)

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    Abstract

    I develop a model of competition between walkable shops, and other shops whose customers drive (car-oriented shops). Walkable shops operate in monopolistic competition within a local area, or neighborhood. A small cost advantage for car-oriented shops can turn into a larger price advantage. High prices in walkable shops effect a regressive transfer from poorer to richer consumers, since the poorer are less likely to have cars. Internalizing environmental and social costs of urban automobile use could reduce prices and increase capacity utilization in walkable shops in more densely populated local areas. Many common combinations of planning and pricing tools fail to internalize important costs, and may actually subsidize driving to shop, but a combination of planning and the pricing (through taxation) of retail parking could effectively internalize the relevant costs.

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    File URL: http://www.bbk.ac.uk/management/our-research/wp/wp2.pdf
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    Bibliographic Info

    Paper provided by Birkbeck Department of Management in its series Management Working Papers with number 2.

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    Length: 32 pages
    Date of creation: Jan 2013
    Date of revision: Jan 2013
    Publication status: Published on Birkbeck Department of Management web site, January 2013, pages 1-32
    Handle: RePEc:img:wpaper:2

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    Web page: http://www.bbk.ac.uk/management/
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    1. Breschi, Stefano & Lissoni, Francesco, 2001. "Knowledge Spillovers and Local Innovation Systems: A Critical Survey," Industrial and Corporate Change, Oxford University Press, Oxford University Press, vol. 10(4), pages 975-1005, December.
    2. Gregory Spencer & Tara Vinodrai & Meric Gertler & David Wolfe, 2010. "Do Clusters Make a Difference? Defining and Assessing their Economic Performance," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 44(6), pages 697-715.
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