THE ECONOMIC-EFFECTS OF EXTENDING SHOP OPENING HOURS

In this paper we investigate the economic effects of deregulation of s hop opening hours legislation. The theoretical literature is rather mi xed about the possible effects of such a policy. Using an empirical mo del for optimal retail behavior, it is shown that the economic potenti al can be high. It is demonstrated that employment goes up mainly beca use of an increase in threshold labor. However, the magnitude of this effect depends on the average number of additional hours as a conseque nce of deregulation. Therefore, by using the model for optimal retail behavior an optimal rule for extending opening hours is given. This ru le implies that the potential for longer opening hours is high. It is, however, shown that in the noncooperative equilibrium this potential is higher than in the cooperative equilibrium, and that large-scale st ores gain more from this deregulation.