Firm Mobility and Location Equilibrium
AbstractTwo types of location equilibria are compared. The first one is that of a simultaneous price and location game, the second is that of a two-stage location-then-price game. It is suggested that equilibrium locations are further apart under the second and profits are higher, since firms internalize the harmful price competition effect of moving close to each other. The paper introduces a nonpurchase option into the logit model of spatial competition and the sensitivity of the equilibrium is analyzed.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 25 (1992)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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- Sougata Poddar & Ruby Toh, 2006. "Asymmetric Spatial Competition," Departmental Working Papers wp0604, National University of Singapore, Department of Economics.
- Hemanta Shrestha & Dennis Heffley, 2003. "Regional Integration and Industrial Location in a Landlocked Spatial Economy," Working papers 2003-07, University of Connecticut, Department of Economics.
- Behringer, Stefan, 2007. "Spacial Predation in the UK Newspaper Industry," MPRA Paper 3242, University Library of Munich, Germany, revised 15 Apr 2007.
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