Optimal transportation policy with strategic locational choice
AbstractThis 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 InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 25 (1995)
Issue (Month): 4 (August)
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Web page: http://www.elsevier.com/locate/regec
Other versions of this item:
- Thisse, Jacques-François & Wildasin, David, 1994. "Optimal Transportation Policy with Strategic Locational Choice," CEPR Discussion Papers 933, C.E.P.R. Discussion Papers.
- Thisse, J.-F & Wildasin, D. E., . "Optimal transportation policy with strategic locational choice," CORE Discussion Papers RP -1172, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
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