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FREE PARKING FOR ALL IN SHOPPING MALLS
Author(s) -
Hasker Kevin,
Inci Eren
Publication year - 2014
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12090
Subject(s) - shopping mall , monopoly , business , microeconomics , parking guidance and information , economics , advertising , transport engineering , engineering
We show why a mall provides parking for free and embed the parking costs in the prices of the goods. Essentially, charging a parking fee to risk‐averse customers means penalizing them for not finding their desired good. This result holds whether the mall has monopoly power or prices competitively, if there is parking validation, and if there is a trade‐off between shopping and parking spaces. It is also the attainable social optimum. The equilibrium lot size is too small, yielding a rationale for minimum parking requirements. However, parking fees may be positive and lots may be too large in urban malls.