IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/1516.html
   My bibliography  Save this paper

Large-Scaled Chain Stores versus Small-Scaled Local Stores

Author

Listed:
  • Hiroaki Sandoh

    () (Graduate School of Economics, Osaka University)

  • Risa Suzuki

    (Graduate School of Economics, Osaka University)

Abstract

In some local areas, we can occasionally observe a competition between a large-scaled chain store and a small-scaled local independent store. A large-scaled chain store usually attracts consumers by appealing its width and depth of products variety. A local independent store with limited assortments of products competes with the chain store by concentrating upon some specific kinds of products and by offering lower prices for them than the chain store. This is possible for the local store partly because of lower labor costs and for various other reasons. The present study deals with the pricing competition in a duopoly between a chain store and a local store. For the purpose of expressing the difference in product assortments between the two stores, a chain store is assumed to deal in two kinds of products, P 1 and P 2 , while a local store is assumed to sell only P 1 . Moreover, we assume all the consumers purchase P 1 at a chain store or a local store by referring to their prices, and P 2 at A . A Nash and a Stackelberg equilibrium are examined to show that the local store can possibly survive the competition with the chain store. The socially optimal welfare is also investigated to reveal it can be realized in a monopoly.

Suggested Citation

  • Hiroaki Sandoh & Risa Suzuki, 2015. "Large-Scaled Chain Stores versus Small-Scaled Local Stores," Discussion Papers in Economics and Business 15-16, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:1516
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Keywords

    Chain store; Local independent store; Duopoly; Hotelling; Price competition;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    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:osk:wpaper:1516. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Atsuko SUZUKI). General contact details of provider: http://edirc.repec.org/data/feosujp.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.