Pashigian and Gould found that in largeshopping centers rents paid by retailers were very different.
[1] Department stores paid an average of 11 times less than shoe storesand 20 times less than jewelries. (1) How can you explain these unequal rents? Ifthe urban geography of a country impedes the development of new shopping centers,(2) how will this situation affect the number of department stores? (3) Why?
[1] Pashigian, B Peter, and Eric D. Gould, 1998. “
InternalizingExternalities: The Pricing of Space in Shopping Malls,”
Journal of Law & Economics,41(1): 115-42.