Do we go shopping downtown or in the 'burbs?
Scientific organizationHigher School of Economics (HSE)
PositionLeading research fellow
Scientific disciplineHumanities & Social sciences
TopicDo we go shopping downtown or in the 'burbs?
We combine spatial and monopolistic competition to study market interactions between downtown retailers and an outlying shopping mall. The market solution stems from the interplay between the market expansion and the competition effect. Firms' profits increase (decrease) with the entry of local competitors when the former (latter) dominates. Downtown retailers vanish swiftly when the mall is large. A predatory but efficient mall need not be regulated, whereas the regulator must restrict the size of a mall accommodating downtown retailers.
Keywordsshopping behavior; retailers; shopping mall; spatial competition; monopolistic competition