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When do co-located firms selling identical products thrive?
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Bernhardt, Dan, Constantinou, Evangelos and Shadmehr, Mehdi (2022) When do co-located firms selling identical products thrive? Journal of Industrial Economics, 70 (3). pp. 565-590. doi:10.1111/joie.12297 ISSN 0022-1821.
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Official URL: https://doi.org/10.1111/joie.12297
Abstract
When consumers only see prices once they visit stores, and some consumers have time to comparison shop, co-location commits stores to compete and lower prices, which draws consumers away from isolated stores. Profits of co-located firms are a single-peaked function of the number of shoppers---co-located firms thrive when there are some shoppers, but not too many. When consumers know in advance whether they have time to shop, effects are enhanced: co-located stores may draw enough shoppers to drive the expected price paid by a non-shopper below that paid when consumers do not know if they will have time to shop.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Retail trade, Store location, Strategic alliances (Business) , Pricing -- Mathematical models, Consumer behavior -- Mathematical models, Consumer behavior -- Psychological aspects | ||||||||
Journal or Publication Title: | Journal of Industrial Economics | ||||||||
Publisher: | Wiley-Blackwell Publishing Ltd. | ||||||||
ISSN: | 0022-1821 | ||||||||
Official Date: | September 2022 | ||||||||
Dates: |
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Volume: | 70 | ||||||||
Number: | 3 | ||||||||
Page Range: | pp. 565-590 | ||||||||
DOI: | 10.1111/joie.12297 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Copyright Holders: | © John Wiley & Sons Ltd and the Editorial Board of the Journal of Industrial Economics | ||||||||
Date of first compliant deposit: | 8 March 2021 | ||||||||
Date of first compliant Open Access: | 31 October 2022 | ||||||||
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