Price Competition, Business Hours and Shopping Time Flexibility

25 Pages Posted: 15 Aug 2008

See all articles by Oz Shy

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Rune Stenbacka

Hanken School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 0000

Abstract

We analyse retail industries with two-stage competition in opening hours and prices. We explore the effects of consumers shopping time flexibility by comparing bi-directional consumers with forward or backward-oriented consumers, who can either postpone or advance their shopping, but not both. We demonstrate that retailers with longer opening hours charge higher prices and that opening hour differentiation softens price competition. We show that competition does not create incentives for retailers to expand their business hours beyond social optimum. In this respect our model does not justify restrictions on shopping hours.

Suggested Citation

Shy, Oz and Stenbacka, Rune, Price Competition, Business Hours and Shopping Time Flexibility (0000). The Economic Journal, Vol. 118, Issue 531, pp. 1171-1195, August 2008. Available at SSRN: https://ssrn.com/abstract=1227168 or http://dx.doi.org/10.1111/j.1468-0297.2008.02165.x

Oz Shy (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

HOME PAGE: http://https://www.frbatlanta.org/research/economists/shy-oz.aspx

Rune Stenbacka

Hanken School of Economics ( email )

P.O. Box 479
FI-00101 Helsinki, 00101
Finland
+35 89 4313 3433 (Phone)
+35 89 4313 3382 (Fax)

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