Spatial Location of Retail Stores: Measures against Hollowing-out of retail stores

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Concentration or hollowing-out of retail stores are the results of market interactions. Since shopping behavior involves market failures, the spatial location of retail stores is not socially optimal. Our objective is to analyze how market failure affects consumers' welfare through the change in retail store location, which is caused by urban policies including transportation planning. We consider four types of market failures in commerce: a) spatial price competition of commercial location, 2) imperfect competition among retail stores, 3) shopping externality caused by multipurpose (one-stop) shopping and 4) asymmetric information on the quality of goods.