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Aggregation of retail stores

Abstract : 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.
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Contributor : Pablo Jensen <>
Submitted on : Wednesday, November 1, 2006 - 3:04:06 PM
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Pablo Jensen, Jean Boisson, Hernán Larralde. Aggregation of retail stores. Physica A: Statistical and Theoretical Physics, Elsevier, 2005, 351 (2-4), pp. 551-570. ⟨10.1016/j.physa.2005.01.002⟩. ⟨halshs-00110817⟩



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