抄録
This paper presents a model of the distribution system as vertically related activities in which the wholesaler is a spatial monopolistic manufacturer and a retailer a competitive distributor owning independent unit stores. The manufacturer can make sales to all spatially separated retailers selling identical goods. The retailers are subject to Löschian competition while they are monopolists in their fixed market areas since each retailer conjectures hypersensitive rival reactions to own price changes. Part of the retailers contemplate organizing a chain of stores aiming to reduce their selling cost, management cost and physical distribution cost, which in turn tends to lower physical distribution cost for the manufacturer. The individual market radius, retail price and wholesale price in equilibrium depend on the cost structures of both the upstreamer and the downstreamers.
We show that spatial competition under heterogeneous cost conditions due to chain operation induces an individual retailer's market radius to increase (decrease) and retail price to fall (rise), thereby increasing (decreasing) profits for individual chain stores (independent unit stores). A low cost operation of chain stores definitively raises wholesale price for independent unit stores, but such a strategy tends to raise the chain stores' burden share of physical distribution cost, which in turn lowers wholesale price for chain stores generally. In the process, both the profit for the manufacturer and the aggregate consumer surplus increase. The total social surplus increases with the establishment of chain stores-at the expense of remaining independent unit stores and their customers, however.
