Large-Scaled Chain Stores versus Small-Scaled Local Stores of the Local Production for Local Consumption

Suzuki, Risa; Sandoh, Hiroaki

Large-Scaled Chain Stores versus Small-Scaled Local Stores of the Local Production for Local Consumption

Suzuki, Risa; Sandoh, Hiroaki

Discussion Papers In Economics And Business, 2015, 15-16-Rev.3, 1-13

Number of Access:126（2025-06-13 10:32 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/51741

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Title	Large-Scaled Chain Stores versus Small-Scaled Local Stores of the Local Production for Local Consumption
Creator	CreatorName Suzuki, Risa
Creator	NRID 1000040167440 1000040167440 CreatorName Sandoh, Hiroaki
Subject	Chain store
	Local independent store
	Duopoly
	Hotelling
	Price competition
Description	* Revised： [15-16, 2015]
	* Revised：Large-Scaled Chain Stores versus Small-Scaled Local Stores [15-16-Rev., 2015]
	* Revised： [15-16-Rev.2, 2015]
Abstract	In some localities, a large-scale chain retailer competes against a small-scale local independent retailer that specializes in, for instance, vegetables, fruits, and flowers produced locally for local consumption. The former usually attracts consumers by emphasizing its width and depth of products variety, whereas the latter seeks to overcome its limited products assortment by offering lower prices for them than the chain store. This is possible for the local store partly because of lower labor costs and for various other reasons. This study employs the Hotelling unit interval to examine price competition in a duopoly featuring one large-scale chain retailer and one local retailer. To express differences in their product assortments, we assume that the large-scale retailer denoted by A sells two types of product, G1 and G2, whereas the local retailer denoted by B sells only G1. Moreover, we assume that all consumers purchase G1 at A or B after comparing prices and buy G2 at A . We examine both Nash and Stackelberg equilibrium to indicate that the local retailer can survive competition with the large-scale chain retailer. We also reveal that a monopolistic market structure, not duopoly, optimize the social welfare if consumers always purchase both G1 and G2.
Publisher	Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University
Source Title	Discussion Papers In Economics And Business
Volume (Issue)	15-16-Rev.3
Page	1-13
Date of Issued	2015-09
Language	English
Handle URL	https://hdl.handle.net/11094/51741
NCID	AA1160366X
Relation.references	URI http://www2.econ.osaka-u.ac.jp/library/global/dp/1516R3.pdf
Access Rights	metadata only access
Category	ディスカッション／ワーキング・ペーパー DP/WP
Category	Discussion Papers In Economics And Business
Date.Updated	2015-06
	2015-08
	2015-09

Resource Type	technical report
Local Type	DP/WP
DCMI Type	Text
DCTERMS.bibliographicCitation	Discussion Papers In Economics And Business. 2015, 15-16-Rev.3, p. 1-13
DC.title	Large-Scaled Chain Stores versus Small-Scaled Local Stores of the Local Production for Local Consumption
DC.creator	Suzuki, Risa
DC.creator	Sandoh, Hiroaki
DC.publisher	Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University
DC.language' scheme='DCTERMS.RFC1766	English
DC.type' scheme='DCTERMS.DCMIType	Text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2015-09
DC.relation' scheme='DCTERMS.URI	http://www2.econ.osaka-u.ac.jp/library/global/dp/1516R3.pdf
DC.subject	Chain store
	Local independent store
	Duopoly
	Hotelling
	Price competition
DC.description	* Revised： [15-16, 2015]
	* Revised：Large-Scaled Chain Stores versus Small-Scaled Local Stores [15-16-Rev., 2015]
	* Revised： [15-16-Rev.2, 2015]
DCTERMS.abstract	In some localities, a large-scale chain retailer competes against a small-scale local independent retailer that specializes in, for instance, vegetables, fruits, and flowers produced locally for local consumption. The former usually attracts consumers by emphasizing its width and depth of products variety, whereas the latter seeks to overcome its limited products assortment by offering lower prices for them than the chain store. This is possible for the local store partly because of lower labor costs and for various other reasons. This study employs the Hotelling unit interval to examine price competition in a duopoly featuring one large-scale chain retailer and one local retailer. To express differences in their product assortments, we assume that the large-scale retailer denoted by A sells two types of product, G1 and G2, whereas the local retailer denoted by B sells only G1. Moreover, we assume that all consumers purchase G1 at A or B after comparing prices and buy G2 at A . We examine both Nash and Stackelberg equilibrium to indicate that the local retailer can survive competition with the large-scale chain retailer. We also reveal that a monopolistic market structure, not duopoly, optimize the social welfare if consumers always purchase both G1 and G2.
DC.format	51741
citation_title	Large-Scaled Chain Stores versus Small-Scaled Local Stores of the Local Production for Local Consumption
citation_author	Suzuki, Risa
citation_author	Sandoh, Hiroaki
citation_publisher	Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University
citation_language	English
citation_date	2015-09
citation_journal_title	Discussion Papers In Economics And Business
citation_volume	15-16-Rev.3
citation_firstpage	1
citation_lastpage	13
citation_public_url	https://hdl.handle.net/11094/51741
citation_abstract_html_url	http://www2.econ.osaka-u.ac.jp/library/global/dp/1516R3.pdf

Large-Scaled Chain Stores versus Small-Scaled Local Stores of the Local Production for Local Consumption

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