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Optimal transportation policy with strategic locational choice

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  • Thisse, Jacques-Francois
  • Wildasin, David E.

Abstract

This paper presents a model of strategic locational choice by duopolistic firms in an urban area where consumer locations are endogenous and where a public facility is exogenously fixed. A welfare analysis taking their strategic behaviour into account is conducted. It is shown that the firms' equilibrium locations often differ from the optimal locations which, in contrast to standard location theory, are not at the quartiles of the urban area. Corrective transportation taxes or subsidies can be used to support an optimal locational structure. Changes in transportation costs require unit-for-unit offsetting changes in transportation taxes or subsidies.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 25 (1995)
Issue (Month): 4 (August)
Pages: 395-410

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Handle: RePEc:eee:regeco:v:25:y:1995:i:4:p:395-410

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  1. FUJITA, Masahisa & THISSE, Jacques-François, . "Spatial competition with a land market: Hotelling and Von Thunen unified," CORE Discussion Papers RP -744, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Thisse, Jacques-Francois, 1993. "Oligopoly and the polarization of space," European Economic Review, Elsevier, vol. 37(2-3), pages 299-307, April.
  3. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455.
  4. FUJITA, Masahisa & THISSE, Jacques-François, . "Spatial duopoly and residential structure," CORE Discussion Papers RP -942, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
  6. THISSE, Jacques & WILDASIN, David, 1990. "Public facility location and urban spatial structure. Equilibrium and welfare analysis," CORE Discussion Papers 1990025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Cited by:
  1. E. Bacchiega & E. Randon & L. Zirulia, 2010. "Strategic Accessibility Competition," Working Papers 696, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Baudewyns, 2001. "Urban Public Facility Location, Multipurpose Trips and Spatial Competition: equilibrium and welfare analysis," FEUNL Working Paper Series wp400, Universidade Nova de Lisboa, Faculdade de Economia.

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