The Economics of Retailing and Distribution
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The Economics of Retailing and Distribution

Roger R. Betancourt

This book provides a uniform and coherent approach to the analysis of distribution systems in general and retail systems in particular. It develops the fundamentals of retail demand and supply, and demonstrates how the provision of distribution services is a principal determinant of economic outcomes in retail exchanges for both retailers and their customers, as well as for other agents such as suppliers and franchisors.
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Chapter 10: Retailing of Services and Concluding Issues

Roger R. Betancourt


In the previous nine chapters I have emphasized the role of distribution services in determining economic outcomes. Furthermore, in Chapter 1, I stressed that most of the results derived here for the retailing of goods also apply to the retailing of services. This applicability is eminently desirable from an economic viewpoint, because about 70 per cent of GDP in advanced economies is associated with activities that can be described as the production and distribution of services.1 In view of this economic importance, it is desirable to provide additional support for our claim of applicability. A useful starting point in this endeavor is identifying explicitly the inherent characteristics of services, if any, and of distribution services in particular. Thus, in section 10.1, I consider the question, what are the ‘fundamental’ or defining characteristics of services, including those of the distribution services emphasized in this book? Throughout the book I have also made reference to and even discussed in some detail situations that involve the retailing of services rather than of goods.2 This has been done, however, without addressing consistently systematic differences that may arise between the retailing of services and the retailing of goods. Thus, in section 10.2, I consider two related questions, are there implications of these ‘fundamental’ characteristics of services identified in section 10.1 for their retailing? Or, more generally, are there ‘fundamental’ ways in which the retailing of services differs from the retailing of goods? Section 10.3 illustrates the relevance of the economic role of distribution services with...

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