Retail competition using free shopping shuttle bus strategies

摘要

Free shopping shuttle bus (FSSB) is a common strategy in some industries such as super market and real estate. After illustrating the application conditions for FSSB, this study surveys competition effects of FSSB strategy on retailers by a duopoly spatial Bertrand model. The conclusions of this article show that the cost of FSSB and features of the market are two crucial factors to determine whether the FSSB is employed or not. When the demands are fixed, firms do not benefit from FSSB. But if the market is not fully covered, FSSB strategy has significant positive effects on market size improvement.