Aggregation of retail stores

Pablo Jensen (1, 2) , Jean Boisson (1) , Hernán Larralde (3)

1 Phys-ENS - Laboratoire de Physique de l'ENS Lyon
2 LET - Laboratoire d'économie des transports
3 Centro de Ciencias Físicas

We propose a simple model to understand the economic factors that induce aggregation of
some businesses over small geographical regions. The model incorporates price competition
with neighboring stores, transportation costs and the satisfaction probability of finding the
desired product. We show that aggregation is more likely for stores selling expensive products
and/or stores carrying only a fraction of the business variety. We illustrate our model with
empirical data collected in the city of Lyon.

Mots clés: simulations; models; retail stores

Domaines: Physique et Société [physics.soc-ph]; Géographie

Pablo Jensen, Jean Boisson, Hernán Larralde. Aggregation of retail stores. Physica A: Statistical and Theoretical Physics, 2005, 351 (2-4), pp. 551-570. ⟨10.1016/j.physa.2005.01.002⟩. ⟨halshs-00110817⟩