232 , 2016-03-11 , 鳴門教育大学 , Naruto University of Education
Consumers purchase various goods at retail shops. Because products sold at such shops are homogeneous, the advertising of these shops causes spillover effects and each retailer would have incentive to become a free rider. We consider that services offered by retail shops differentiate these shops, in which case, advertising of their services would not have spillover effects. We analyze the advertising of retail shops in spatial competition and prove that advertising of their services expands market share when these shops supply original services. Moreover, we consider the services that retailers offer as effective methods of competing against internet shopping.