ESSAYS ON DIGITAL TECHNOLOGY AND RETAIL GEOGRAPHY

<p dir="ltr">This dissertation explores how digital technology transforms the spatial structure of retail markets by altering the informational environment in which consumers and firms make decisions. In particular, it investigates how online search tools, such as Yelp, reshape the incentives for retail agglomeration by reducing consumer search frictions and increasing price transparency.</p><p dir="ltr">The first essay develops a spatial competition model that extends Konishi (2005) to evaluate the role of consumer search frictions in shaping equilibrium firm location patterns. By comparing environments with and without search frictions, the model isolates how digital search alters the trade-offs between the benefits of clustering (via market-size effects) and the costs of intensified competition. The findings show that in the presence of search frictions, clustering remains a dominant strategy due to increased expected demand. However, when search frictions are eliminated-reflecting perfect online information—the incentive to agglomerate collapses, and spatial dispersion becomes the equilibrium outcome.</p><p dir="ltr">The second essay provides empirical evidence on the impact of digital restaurant search by studying the diffusion of Yelp across U.S. markets from 2003 to 2014. Using detailed establishment-level data and variation in Yelp penetration across time and space, the analysis examines how digital visibility affects the location choices of chain and independent restaurants. The results indicate that as Yelp adoption increases, independent restaurants are more likely to locate in dispersed, lower-visibility areas, while chain restaurants remain concentrated in high-traffic, prominent retail clusters. These patterns are consistent with the theoretical prediction that digital search disproportionately benefits establishments with lower brand recognition and marketing budgets.</p><p dir="ltr">Together, these essays highlight the profound influence of digital technology on retail geography. As consumers shift their attention from physical to digital visibility, the traditional logic of agglomeration evolves, with implications for urban retail planning, firm strategy, and platform design.</p>