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THE EFFECT OF RETAIL FIRM OWNERSHIP ON PRICE EQUILIBRIUM *
Author(s) -
Kawamukai Hajime
Publication year - 1996
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1996.tb01268.x
Subject(s) - business , divergence (linguistics) , markup language , externality , industrial organization , microeconomics , commerce , economics , philosophy , linguistics , computer science , xml , operating system
. This paper examines the effect of retail firm ownership on price equilibrium using a simple linear‐city model. It is shown that price divergence emerges due to the differences in retail firm ownership, because retail firms under different ownership internalize shopping externalities differently. It is also shown that if a commercial center has two specialized retail firms, these stores charge the same markup for different goods at the equilibrium.