Spatial Economics Research on Formation Mechanism of Commercial Circle Based on Consumer Searching Cost

Based on Nelson’s Searching Cost Saving related theory, through introducing concepts of Shopping Cost, Taste Searching Cost I, Taste Searching Cost II, and Location Searching Cost, explaining consumers’ behavior of searching and shopping in depth, this paper constructs the Spatial Economic Model on Consumers Searching Expect within Commercial Circle. The results of the study show that: first, the satisfaction provided by Commercial Circle goods increases with the improvement of consumer demand and the reduction of Searching Cost for a new store within Commercial Circle; second, the satisfaction provided by Isolated Enterprise goods increases with the improvement of consumer demand, the increase in the numbers of enterprises within Commercial Circle and the reduction of Searching Cost for a new store within Commercial Circle; third, the influence of Location Searching Cost of goods and distance between Commercial Circle and Isolated Enterprise is decided by satisfaction comparison of goods provided respectively by Commercial Circle and Isolated Enterprise.