Price competition, business hours, and shopping time flexibility

Arbeitspapier

We analyze differentiated retail industries where shops engage in two-stage competition with respect to 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 calculate both symmetric and asymmetric subgame perfect equilibria in closing hours and demonstrate how the equilibrium configurations depend on the cost increases associated with extended business hours, as well as the relative densities of day and night shoppers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2004-14

Classification and Topics

• Classification: Wirtschaft ; Retail and Wholesale Trade; e-Commerce
• Subject: Business Hours ; Delayed or Advanced Shopping ; Differentiated Business Hours ; Price Competition ; Shopping Time Flexibility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Shy, Oz ; Stenbacka, Rune
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/50970
• Last update: 10.03.2025, 11:41 AM CET