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Cost reducing investments and spatial competition

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Author Info

  • Domenico Scalera

    ()
    (Università del Sannio, Italy)

  • Alberto Zazzaro

    ()
    (Università Politecnica delle Marche, Italy)

Abstract

In this paper we analyze the relationship between competition and cost reducing investments in the context of a location model. In particular, we derive the symmetric subgame-perfect equilibrium of a three-stage circular city model with closed-loop strategies, and study the effects of changes in competition fundamentals under both a given number of firms and free entry

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File URL: http://www.accessecon.com/pubs/EB/2005/Volume12/EB-05L10017A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 12 (2005)
Issue (Month): 20 ()
Pages: 1-8

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Handle: RePEc:ebl:ecbull:eb-05l10017

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Related research

Keywords: Cost reducing investments;

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References

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  1. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  2. Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February.
  3. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
  4. Novshek, William, 1980. "Equilibrium in simple spatial (or differentiated product) models," Journal of Economic Theory, Elsevier, vol. 22(2), pages 313-326, April.
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Cited by:
  1. Matthew Beacham, 2012. "The effect of Stackelberg cost reductions on spatial competition with heterogeneous firms," Discussion Papers 12/14, Department of Economics, University of York.

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