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Imperfect competition and congestion in the City

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  • de Palma, Andre
  • Proost, Stef

Abstract

This paper presents a spatial model to study imperfect competition with congestion. The model is used to examine the price and wage setting of subcenters of a city. Residents live in a city while they shop and work in subcentres. Each subcenter offers one differentiated product and one differentiated workplace. Shopping and commuting from the city to the subcenter requires the use of transport infrastructure that can be congested. We show the existence of a Nash equilibrium in prices and wages and analyse the welfare impacts of congestion charging and infrastructure policies. This paper generalises the literature on imperfect competition with differentiated products as well as the literature on congestion pricing with imperfect competition.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 60 (2006)
Issue (Month): 2 (September)
Pages: 185-209

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Handle: RePEc:eee:juecon:v:60:y:2006:i:2:p:185-209

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Web page: http://www.elsevier.com/locate/inca/622905

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  1. S. P. Anderson & A. de Palma, 1997. "Reverse discrete choice models," THEMA Working Papers, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise 97-09, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  2. Van Dender, Kurt, 2005. "Duopoly Prices Under Congested Access," University of California Transportation Center, Working Papers qt7xw8c3fn, University of California Transportation Center.
  3. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 36(3), pages 1426-1464, September.
  4. Anderson, Simon P & de Palma, Andre, 2001. "Product Diversity in Asymmetric Oligopoly: Is the Quality of Consumer Goods Too Low?," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 49(2), pages 113-35, June.
  5. Victor Ginsburgh & Michiel Keyzer, 1997. "The structure of applied general equilibrium models," ULB Institutional Repository, ULB -- Universite Libre de Bruxelles 2013/1653, ULB -- Universite Libre de Bruxelles.
  6. Edelson, Noel M, 1971. "Congestion Tolls Under Monopoly," American Economic Review, American Economic Association, American Economic Association, vol. 61(5), pages 873-82, December.
  7. Anas, Alex & Kim, Ikki, 1996. "General Equilibrium Models of Polycentric Urban Land Use with Endogenous Congestion and Job Agglomeration," Journal of Urban Economics, Elsevier, Elsevier, vol. 40(2), pages 232-256, September.
  8. Anderson, S. P. & De Palma, A. & Nesterov, Y., . "Oligopolistic competition and the optimal provision of products," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1179, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. repec:cup:cbooks:9780521801386 is not listed on IDEAS
  10. Kurt Van Dender, 2005. "Duopoly prices under congested access," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 45(2), pages 343-362.
  11. repec:cup:cbooks:9780521805247 is not listed on IDEAS
  12. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, American Economic Association, vol. 83(1), pages 161-79, March.
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