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Spatial competition between shopping centers

  • António Brandão

    ()

    (CEF.UP, Faculdade de Economia, Universidade do Porto)

  • João Correia-da-Silva

    ()

    (CEF.UP, Faculdade de Economia, Universidade do Porto)

  • Joana Pinho

    ()

    (Faculdade de Economia, Universidade do Porto)

We study competition between two shopping centers (department stores or shopping malls) located at the extremes of a linear city. In contrast with the existing literature, we do not restrict consumers to make all their purchases at a single place. We obtain this condition as an equilibrium result. In the case of competition between a shopping mall and a department store, we find that the shops at the mall, taken together, obtain a lower profit than the department store. However, the shops at the mall have no incentives to merge into a department store (both sides would lose). It is the department store that has incentives to separate itself into a shopping mall (both sides win).

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File URL: http://www.fep.up.pt/investigacao/workingpapers/10.12.02_wp394.pdf
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 394.

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Length: 29 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:por:fepwps:394
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