A BETTER ANSWER TO A QUESTION OF ANNALISA’S.

A BETTER ANSWER TO A QUESTION OF ANNALISA’S. A couple years ago I ventured an answer here to Annalisa’s question: Why should there be two candle shops right next to each other in a Richmond mall? I speculated that customers made their decisions in two stages—first, shop for a candle; second, choose a candle. Megan McArdle’s essay here is a much better answer. She notes that there are a lot of business clusters in cities, including a whole area in New York City devoted to lamps. Having a lamp store in a cluster with competitors not only leads to exposure to traffic from people who are looking for lamps, but it also permits lamp stores to specialize. She then extends the application to bars. There is a party district in the East Village.