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Opening Hours, Store Quality, and Social Welfare

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  • Yamada, Mai

Abstract

This paper examines retailer's strategies related to opening hours, store quality, and price. We consider a scenario in which the investment in store quality is more costly for longer opening hours. This scenario is suitable for a case where a retailer invests in quality of service such as concierge service and security service in order to increase customers' convenience during business hours. We show that a retailer with shorter opening hours chooses higher service quality and charges lower prices. We also examine the impact of the liberalized and the regulated opening hours on social welfare. We find that the liberalized opening hours is desirable in view of social welfare because service quality and demand in the liberalized opening hours are greater than those in the regulated opening hours.

Suggested Citation

  • Yamada, Mai, 2014. "Opening Hours, Store Quality, and Social Welfare," MPRA Paper 84172, University Library of Munich, Germany, revised 24 Jan 2018.
    • Handle: RePEc:pra:mprapa:84172
    as

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    File URL: https://mpra.ub.uni-muenchen.de/84172/9/MPRA_paper_84172.pdf
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    References listed on IDEAS

    as
    1. Oz Shy & Rune Stenbacka, 2008. "Price Competition, Business Hours and Shopping Time Flexibility," Economic Journal, Royal Economic Society, vol. 118(531), pages 1171-1195, August.
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    3. Jacobsen, Joyce P. & Kooreman, Peter, 2005. "Timing constraints and the allocation of time: The effects of changing shopping hours regulations in The Netherlands," European Economic Review, Elsevier, vol. 49(1), pages 9-27, January.
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    5. Tobias Wenzel, 2011. "Deregulation of Shopping Hours: The Impact on Independent Retailers and Chain Stores," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 145-166, March.
    6. 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.
    7. Clemenz, Gerhard, 1990. "Non-sequential consumer search and the consequences of a deregulation of trading hours," European Economic Review, Elsevier, vol. 34(7), pages 1323-1337, November.
    8. Kay, J A & Morris, C N, 1987. "The Economic Efficiency of Sunday Trading Restrictions," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 113-129, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Opening hours; Location; Multi-dimensional product differentiation; Duopoly;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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