Shopping hours and price competition with loyal consumers

Miguel Flores, Tobias Wenzel

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

We study a retail market where firms compete in shopping hours and prices, and consumers have night-time or day-time preferences. In contrast to the existing literature, we introduce a market expansion effect of extending shopping hours by adding a segment of consumers (the loyal consumers) whose demand is increased if shopping hours are extended. We find that prices can increase due to shopping hours deregulation so that some consumers are worse off with deregulation. We also find that the extent of the price increase depends on the competitiveness of the retail industry.

Original languageEnglish
Pages (from-to)393-407
Number of pages15
JournalB.E. Journal of Economic Analysis and Policy
Volume16
Issue number1
DOIs
Publication statusPublished - 1 Jan 2016

Keywords

  • deregulation
  • loyalty
  • product differentiation
  • shopping hours

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