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Deregulation of shopping hours: The impact on independent retailers and chain stores

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  • Wenzel, Tobias

Abstract

This paper studies shopping hour decisions by retail chains and independent competitors. We use a Salop-type model where retailers compete in prices and shopping hours. Our results depend significantly on efficiency differences between retail chain and independent retailer. If the efficiency difference is small, the independent retailer may choose longer shopping hours than the retail chain and may gain from deregulation at the expense of the retail chain. The opposite result emerges when the efficiency difference is large. Then, the retail chain may benefit whereas the independent retailer loses from deregulation.

Suggested Citation

  • Wenzel, Tobias, 2010. "Deregulation of shopping hours: The impact on independent retailers and chain stores," DICE Discussion Papers 03, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:03
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    References listed on IDEAS

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    1. Esther Gal-Or & Anthony Dukes, 2006. "On the Profitability of Media Mergers," The Journal of Business, University of Chicago Press, vol. 79(2), pages 489-526, March.
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    Cited by:

    1. Senftleben-König, Charlotte, 2014. "Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100539, Verein für Socialpolitik / German Economic Association.
    2. Habte, Osmis, 2017. "Opening Hours Decision and Competition in the Motor Vehicle Inspection Market," Working Papers 2017:20, Lund University, Department of Economics.
    3. Mai Yamada, 2019. "Business Hours, Store Quality, and Social Welfare," Journal of Industry, Competition and Trade, Springer, vol. 19(3), pages 465-478, September.
    4. Charlotte Senftleben-König, 2014. "Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector," SFB 649 Discussion Papers SFB649DP2014-013, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    5. Mario Bossler & Michael Oberfichtner, 2017. "The Employment Effect Of Deregulating Shopping Hours: Evidence From German Food Retailing," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 757-777, April.
    6. Gu, Yiquan & Wenzel, Tobias, 2012. "Transparency, entry, and productivity," Economics Letters, Elsevier, vol. 115(1), pages 7-10.
    7. Charlotte Senftleben-König, "undated". "Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector," BDPEMS Working Papers 2014009, Berlin School of Economics.
    8. Andre Jungmittag, 2018. "The Direct and Indirect Effects of Product Market Regulations in the Retail Trade Sector," JRC Research Reports JRC112222, Joint Research Centre.
    9. Yamada, Mai, 2014. "Opening Hours and Quality Choices," MPRA Paper 56066, University Library of Munich, Germany.
    10. Carlos Hernán González-Campo & Vanessa Zamora Mina, 2020. "Comportamiento de los agentes en el comercio electrónico según modelos de localización," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, vol. 28(1), pages 47-65, June.
    11. Haucap, Justus & Herr, Annika & Frank, Björn, 2011. "In vino veritas: Theory and evidence on social drinking," DICE Discussion Papers 37, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    12. Clémence Christin, 2013. "Entry Deterrence Through Cooperative R&D Over-Investment," Recherches économiques de Louvain, De Boeck Université, vol. 79(2), pages 5-26.
    13. Stühmeier Torben & Wenzel Tobias, 2012. "Regulating Advertising in the Presence of Public Service Broadcasting," Review of Network Economics, De Gruyter, vol. 11(2), pages 1-23, June.
    14. Heimeshoff, Ulrich & Klein, Gordon J., 2013. "Bargaining power and local heroes," DICE Discussion Papers 87, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    15. Benoit, Sabine & Kienzler, Mario & Kowalkowski, Christian, 2020. "Intuitive pricing by independent store managers: Challenging beliefs and practices," Journal of Business Research, Elsevier, vol. 115(C), pages 70-84.
    16. Yamada, Mai, 2014. "Opening Hours, Store Quality, and Social Welfare," MPRA Paper 84172, University Library of Munich, Germany, revised 24 Jan 2018.
    17. Tobias Wenzel, 2010. "Liberalization of Opening Hours with Free Entry," German Economic Review, Verein für Socialpolitik, vol. 11, pages 511-526, November.
    18. Firgo, Matthias & Kügler, Agnes, 2018. "Cooperative pricing in spatially differentiated markets," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 51-67.
    19. Yamada, Mai, 2014. "Opening Hours, Store Quality, and Social Welfare," MPRA Paper 84105, University Library of Munich, Germany, revised 01 Nov 2017.
    20. Erhao Xie, 2018. "Inference in Games Without Nash Equilibrium: An Application to Restaurants, Competition in Opening Hours," Staff Working Papers 18-60, Bank of Canada.
    21. Pennerstorfer, Dieter & Weiss, Christoph, 2013. "Spatial clustering and market power: Evidence from the retail gasoline market," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 661-675.
    22. Bossler, Mario & Oberfichtner, Michael, 2014. "The employment effect of deregulating shopping hours: Evidence from German retailing," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100506, Verein für Socialpolitik / German Economic Association.
    23. Haucap, Justus & Heimeshoff, Ulrich & Klein, Gordon J. & Rickert, Dennis & Wey, Christian, 2013. "Wettbewerbsprobleme im Lebensmitteleinzelhandel," DICE Ordnungspolitische Perspektiven 48, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    24. Vitor Miguel Ribeiro, 2014. "Establishing a link between behavior ecconomics and two-sided markets," FEP Working Papers 538, Universidade do Porto, Faculdade de Economia do Porto.

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    More about this item

    Keywords

    business hours; retailing; deregulation;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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