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Anchor Stores

Author

Listed:
  • Hideo Konishi

    (Boston College)

  • Michael Sandfort

    (U.S. Department of Justice)

Abstract

Planned shopping malls usually have one or more department stores (anchor stores) and multiple specialized retail stores in each commodity category. This paper presents a model of shopping malls in which these two types of stores sell noncomplementary commodities. If anchor stores sell standard (riskless yet low-value) commodities and retail stores sell specialized (high variance yet high expected value) commodities, then each type of store may bene t from collocating with the other, even though the stores sell substitutable products. The underlying intuition is that the presence of each type of retailer enhances consumer traffic at the shopping mall, which benefits the retailer or retailers of the other type. Under some parametric restrictions, the value of this increased traffic more than offsets the loss in markups due to competition from additional sellers at the mall. In this case, it is in a land developer's interest to rent retail space in the mall to both types of retailers. A Tiebout-like argument explains the striking similarity in the composition of stores in planned shopping malls.

Suggested Citation

  • Hideo Konishi & Michael Sandfort, 2001. "Anchor Stores," Boston College Working Papers in Economics 516, Boston College Department of Economics, revised 14 Nov 2002.
    • Handle: RePEc:boc:bocoec:516
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    Cited by:

    1. Gokhan Guven & Eren Inci & Antonio Russo, 2017. "Apparent Competition in Two-Sided Platforms," CESifo Working Paper Series 6660, CESifo.
    2. John M. Clapp & Stephen L. Ross & Tingyu Zhou, 2019. "Retail Agglomeration and Competition Externalities: Evidence from Openings and Closings of Multiline Department Stores in the U.S," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(1), pages 81-96, January.
    3. Tarun Sabarwal & Randal Watson, 2010. "Large stores and contracting for mall locations," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201007, University of Kansas, Department of Economics, revised Oct 2010.
    4. Ding, Ke & Gokan, Toshitaka & Zhu, Xiwei, 2013. "Search, matching, and self-organization of a marketplace," IDE Discussion Papers 396, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. De Borger, Bruno & Russo, Antonio, 2017. "The political economy of pricing car access to downtown commercial districts," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 76-93.
    6. Helen Lawton Smith & Sharmistha Bagchi-Sen & Laurel Edmunds, 2016. "Innovation capacity in the healthcare sector and historical anchors: examples from the UK, Switzerland and the US," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1420-1439, December.
    7. Zhou, Tingyu & Clapp, John M., 2015. "The location of new anchor stores within metropolitan areas," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 87-107.
    8. Ke Ding & Toshitaka Gokan & Xiwei Zhu, 2017. "Small business and the self-organization of a marketplace," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(1), pages 1-19, January.

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    More about this item

    Keywords

    anchor store; shopping mall; taste uncertainty;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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