IDEAS home Printed from https://ideas.repec.org/p/mut/wpaper/23.html
   My bibliography  Save this paper

To pay or not to pay for parking at shopping malls - A rationale from the perspective of two-sided markets

Author

Listed:
  • Inga Molenda

    (Institute of Transport Economics, Muenster)

  • Gernot Sieg

    (Institute of Transport Economics, Muenster)

Abstract

A shopping mall is a meeting platform for retailers and their customers, and may therefore subsidize one particular market side. We consider suburban malls as competitive bottlenecks, because shops are mainly opened up by retail chains which operate in many malls, but whose customers visit only one suburban mall, so as to save transport costs. If the consumer-to-shop externality is larger than the shop-to-consumer externality, parking is subsidized. If customers generate high revenue, the mall operator will generally refrain from charging an entry fee, and offer free parking to its visitors. This result is shown in a model with variety-loving consumers and two competing malls at the end point of a Hotelling line on which their potential visitors, and thus the retailers’ customers, are located.

Suggested Citation

  • Inga Molenda & Gernot Sieg, 2017. "To pay or not to pay for parking at shopping malls - A rationale from the perspective of two-sided markets," Working Papers 23, Institute of Transport Economics, University of Muenster.
    • Handle: RePEc:mut:wpaper:23
    as

    Download full text from publisher

    File URL: http://www.wiwi.uni-muenster.de/ivm/sites/ivm/files/documents/forschung/diskussionspapiere/workingpaper23.pdf
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brueckner, Jan K, 1993. "Inter-store Externalities and Space Allocation in Shopping Centers," The Journal of Real Estate Finance and Economics, Springer, vol. 7(1), pages 5-16, July.
    2. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    3. Molenda, Inga & Sieg, Gernot, 2013. "Residential parking in vibrant city districts," Economics of Transportation, Elsevier, vol. 2(4), pages 131-139.
    4. Calthrop, Edward & Proost, Stef, 2006. "Regulating on-street parking," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 29-48, January.
    5. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-143, Summer.
    6. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    7. Arnott, Richard & Inci, Eren, 2006. "An integrated model of downtown parking and traffic congestion," Journal of Urban Economics, Elsevier, vol. 60(3), pages 418-442, November.
    8. De Borger, Bruno & Russo, Antonio, 2017. "The political economy of pricing car access to downtown commercial districts," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 76-93.
    9. William C. Wheaton, 2000. "Percentage Rent in Retail Leasing: The Alignment of Landlord-Tenant Interests," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 28(2), pages 185-204.
    10. Ersoy, Fulya Yuksel & Hasker, Kevin & Inci, Eren, 2016. "Parking as a loss leader at shopping malls," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 98-112.
    11. Kevin Hasker & Eren Inci, 2014. "Free Parking For All In Shopping Malls," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 1281-1304, November.
    12. Mingardo, G. & van Meerkerk, J., 2012. "Is parking supply related to turnover of shopping areas? The case of the Netherlands," Journal of Retailing and Consumer Services, Elsevier, vol. 19(2), pages 195-201.
    13. Arnott, Richard & Rowse, John, 2009. "Downtown parking in auto city," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 1-14, January.
    14. Eric D. Gould & B. Peter Pashigian & Canice J. Prendergast, 2005. "Contracts, Externalities, and Incentives in Shopping Malls," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 411-422, August.
    15. Daniel Flores & Vitaliy Kalashnikov, 2017. "Parking Discounts: Price Discrimination with Different Marginal Costs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(1), pages 91-103, February.
    16. Mark Armstrong Author-Email: mark.armstrong@ucl.ac.uk Author-Workplace-Name: University College of London, 2006. "Competition in Two-Sided Markets," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 668-691, Autumn.
    17. repec:ucp:bkecon:9781884829987 is not listed on IDEAS
    18. Inci, Eren, 2015. "A review of the economics of parking," Economics of Transportation, Elsevier, vol. 4(1), pages 50-63.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gokhan Guven & Eren Inci & Antonio Russo, 2017. "Apparent Competition in Two-Sided Platforms," CESifo Working Paper Series 6660, CESifo.
    2. Günter Knieps & Thomas Griese & André Grüttner & Oliver Rottmann & Hans-Wilhelm Schiffer & Gernot Sieg & David Stadelmann & Heiner Monheim, 2018. "Fahrverbote, City-Maut, kostenloser öffentlicher Nahverkehr: Wege aus dem Verkehrskollaps?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(09), pages 03-22, May.
    3. Chengxiang Zhuge & Chunfu Shao & Xia Li, 2019. "Empirical Analysis of Parking Behaviour of Conventional and Electric Vehicles for Parking Modelling: A Case Study of Beijing, China," Energies, MDPI, vol. 12(16), pages 1-21, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Borger, Bruno & Russo, Antonio, 2017. "The political economy of pricing car access to downtown commercial districts," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 76-93.
    2. Olus Inan, Murat & Inci, Eren & Robin Lindsey, C., 2019. "Spillover parking," Transportation Research Part B: Methodological, Elsevier, vol. 125(C), pages 197-228.
    3. Inci, Eren, 2015. "A review of the economics of parking," Economics of Transportation, Elsevier, vol. 4(1), pages 50-63.
    4. Gokhan Guven & Eren Inci & Antonio Russo, 2017. "Apparent Competition in Two-Sided Platforms," CESifo Working Paper Series 6660, CESifo.
    5. DE BORGER, Bruno & RUSSO, Antonio, 2015. "Lobbying and the political economy of pricing car access to downtown commercial districts," Working Papers 2015012, University of Antwerp, Faculty of Business and Economics.
    6. Inci, Eren & Lindsey, Robin, 2015. "Garage and curbside parking competition with search congestion," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 49-59.
    7. Evangelinos, Christos & Tscharaktschiew, Stefan & Marcucci, Edoardo & Gatta, Valerio, 2018. "Pricing workplace parking via cash-out: Effects on modal choice and implications for transport policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 369-380.
    8. Arnott, Richard & Inci, Eren & Rowse, John, 2015. "Downtown curbside parking capacity," Journal of Urban Economics, Elsevier, vol. 86(C), pages 83-97.
    9. Ersoy, Fulya Yuksel & Hasker, Kevin & Inci, Eren, 2016. "Parking as a loss leader at shopping malls," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 98-112.
    10. Gokhan Guven & Eren Inci & Antonio Russo, 2022. "Competition, Concentration and Percentage Rent in Retail Leasing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(2), pages 401-430, June.
    11. van Ommeren, Jos & de Groote, Jesper & Mingardo, Giuliano, 2014. "Residential parking permits and parking supply," Regional Science and Urban Economics, Elsevier, vol. 45(C), pages 33-44.
    12. Kevin Hasker & Eren Inci, 2014. "Free Parking For All In Shopping Malls," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1281-1304, November.
    13. Takayama, Yuki & Kuwahara, Masao, 2016. "Scheduling preferences, parking competition, and bottleneck congestion: A model of trip timing and parking location choices by heterogeneous commuters," MPRA Paper 68938, University Library of Munich, Germany.
    14. Justus Haucap, 2019. "Competition and Competition Policy in a Data-Driven Economy," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(4), pages 201-208, July.
    15. Ding, Yanyan & Jian, Sisi, 2022. "Strategic collaboration between land owners and charging station operators: Lease or outsource?," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 183-211.
    16. Brudner, Amir, 2023. "On the management of residential on-street parking: Policies and repercussions," Transport Policy, Elsevier, vol. 138(C), pages 94-107.
    17. Lam, W., 2015. "Switching Costs in Two-sided Markets," LIDAM Discussion Papers CORE 2015024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    18. Renato Gomes & Alessandro Pavan, 2013. "Cross-Subsidization and Matching Design," Discussion Papers 1559, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    19. Tscharaktschiew, Stefan & Reimann, Felix, 2021. "On employer-paid parking and parking (cash-out) policy: A formal synthesis of different perspectives," Transport Policy, Elsevier, vol. 110(C), pages 499-516.
    20. Dietrich, Antje-Mareike, 2016. "Governmental platform intermediation to promote alternative fuel vehicles," Economics Department Working Paper Series 16, Technische Universität Braunschweig, Economics Department.

    More about this item

    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mut:wpaper:23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Birgit Rueschenschmidt (email available below). General contact details of provider: https://edirc.repec.org/data/ilmuede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.