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Delivered Pricing, Positive Externalities and Firm Dispersion

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Author Info
Barnali Gupta () (Miami University)
Abstract

This note examines firm locations in a delivered pricing model with positive production externalities. We find that, quite counter intuitively, firms will disperse rather than move closer, when production externalities are positive and reciprocal. Furthermore, we see a divergence between the private and social optimal locations, which is in contrast to the coincidence of these locations in the standard delivered pricing model.

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File URL: http://www.accessecon.com/pubs/EB/2008/Volume12/EB-08L10013A.pdf
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Publisher Info
Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 12 (2008)
Issue (Month): 32 ()
Pages: 1-6
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:v:12:y:2008:i:32:p:1-6

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Related research
Keywords: Location dispersion;

Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

References listed on IDEAS
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  1. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May. [Downloadable!] (restricted)
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  2. Stahl, Konrad, 1982. "Differentiated Products, Consumer Search, and Locational Oligopoly," Journal of Industrial Economics, Blackwell Publishing, vol. 31(1-2), pages 97-113, September. [Downloadable!] (restricted)
  3. Hamilton, Jonathan H. & Thisse, Jacques-Francois & Weskamp, Anita, 1989. "Spatial discrimination : Bertrand vs. Cournot in a model of location choice," Regional Science and Urban Economics, Elsevier, vol. 19(1), pages 87-102, February. [Downloadable!] (restricted)
  4. Gupta, Barnali, 1994. "Competitive spatial price discrimination with strictly convex production costs," Regional Science and Urban Economics, Elsevier, vol. 24(2), pages 265-272, April. [Downloadable!] (restricted)
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