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| Author: | Inderst, R. Irmen, A. |
| Title: | Shopping hours and price competition |
| Journal: | European Economic Review
2005 : JUL, VOL 49:5, p. 1105-1124 |
| Index terms: | Retailing Product differentiation Competition Prices Trading hours Deregulation Models |
| Language: | eng |
| Abstract: | This paper develops an argument why retail prices may rise in response to the deregulation of opening hours (hereafter as: o-hrs). This point is made in a model of imperfect duopolistic competition. In a deregulated market, retailers view the choice of o-hrs. as a means to increase the degree of perceived product differentiation thus relaxing price competition. If the consumersÂ’ preference intensity for time is sufficiently high the equilibrium configuration has asymmetric shopping hours where one retailer stays open for longer than the other. Both retailers charge higher prices than under regulation, and both are strictly better off. |
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