CLUB FORMATION MECHANISM FOR TRANSPORT-COMMUNITY CREDIT CARDS

Abstract

 In this paper, the roles of transport-community cards jointly issued by a public transport firm and retails are investigated as a means to vitalize an obsolescence shopping center located in a middle of a city. When both the price of goods supplied by the retails and the transport fares affect the consumers' behavior, there exist pecuniary externality between the behaviors of the retails and transport firms. The introduction of a transport-community cards system enables to integrate a basket of goods and transport service into a single commodity; thus, the pecuniary externality can be internalized by price coordination. In addition, the paper clarifies theoretically that the transport firm initiatively decides the price of the transportation service and the retails transfer their incomes to the transport firm so that they are induced to jointly issue the transport-community cards.