Retail Trade Concentration Due to Consumers' Imperfect Information
Volume: Volume 14, No. 1
Issue: Spring 1983
Pages: pp. 275-282
Authors: Asher Wolinsky
Title: Retail Trade Concentration Due to Consumers' Imperfect Information
Abstract: The main idea of this article is that geographical concentration of stores selling similar products can be explained by consumers' imperfect information and their resulting need to search the market. A cluster of stores sustained by these forces is not necessarily located at the point that minimizes consumer transportation costs--a fact that distinguishes it from clustering phenomena which may be explained by Hotelling-type arguments. For the purposes of the analysis this article presents a model of monopolistic competition under imperfect information which could be of independent interest.
JEL Classification
Microeconomics Theory of Production (0223)
Theory of Uncertainty and Information (0261)
Industry Studies Distributive Trades Retail Trade (6333)
Theory of Regional Economics (9411)