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Socially Optimal Service hours with Special Offers

Author

Listed:
  • Hyewon Kim

    (Graduate School of Economics, Osaka University)

  • Hiroaki Sandoh

    (Graduate School of Economics, Osaka University)

Abstract

It is very important for service industries to decentralize consumers at peak time, and thereby to increase sales not at peak time. This study discusses an optimal number of business hours for a service industry when the service provider offers a price discount immediately after the opening time and just before the closing time. For a specific ideal service time distri- bution of consumers, the optimal opening and closing time are explored. Clarified are the conditions under which an optimal number of business hours exists to maximize the social welfare. Numerical examples are also presented to illustrate the theoretical underpinnings of the proposed model.

Suggested Citation

  • Hyewon Kim & Hiroaki Sandoh, 2015. "Socially Optimal Service hours with Special Offers," Discussion Papers in Economics and Business 15-11, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1511
    as

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1511.pdf
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    References listed on IDEAS

    as
    1. Inderst, Roman & Irmen, Andreas, 2005. "Shopping hours and price competition," European Economic Review, Elsevier, vol. 49(5), pages 1105-1124, July.
    2. Ferris, J Stephen, 1990. "Time, Space, and Shopping: The Regulation of Shopping Hours," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(1), pages 171-187, Spring.
    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.
    4. de Meza, David, 1984. "The Fourth Commandment: Is it Pareto Efficient?," Economic Journal, Royal Economic Society, vol. 94(374), pages 379-383, June.
    5. Gerhard CLEMENZ, 1990. "Competition Via Shopping Hours: A Case For Regulation?," Vienna Economics Papers vie9005, University of Vienna, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Price discount; Service hours; Ideal service time distribution; Social welfare;
    All these keywords.

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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