SPATIAL EQUILIBRIA OF RETAIL ACTIVITY AND THEIR SOCIAL EFFICIENCY

Abstract

Two types of retail location equilibria are formulated to analyze the effects of industrial organizations on spatial patterns and social efficiency. The first model supposes that all retailers are of small size and behave as price-takers, while the second model supposes the oligopoly by large scale retailers. I examined social efficiency of these two equilibrium solutions by comparing with Pareto-efficient allocation. I also analyzed the spatial patterns of retail location, and distribution of economic welfare among agents by means of numerical simulations.