Marketing Strategy of Rent and Space Allocation for Dominant Retailer in Shopping Center

摘要

Dominant retailers can sign lucrative contracts with developers when they have strong relative bargaining power and positive externalities compared with other retailers. Previous studies explain that a developer allocates more space to dominant retailers in a shopping center because their sales abilities are important. We show the same result even though we assume that the rent for the dominant retailer is not determined through bargaining and is fixed at some exogenously determined small value as well as that the dominant retailer has no externalities. Moreover, we discuss the difference in the rent between the two types of retailers and the optimization strategy of the developer. There are a developer, a dominant retailer, and a weak retailer. The developer determines the rent for the weak retailer and space allocation in a shopping center. Then, these retailers compete in quantities.