Partial Agglomeration or Dispersion in Spatial Cournot Competition
AbstractWe revisit works by Pal and Matsushima, which, respectively, present different equilibrium locations. We consider nonlinear transport costs and show that Pal's result (dispersion) is more robust than Matsushima's (partial agglomeration). Pal's result holds true for any transport cost function, while Matsushima's does not hold under strong concavity or convexity of the transport cost function. If we consider sequential move of location, Pal's result holds for any transport costs. On the other hand, Matsushima's does not hold except for linear transport cost. We also discuss welfare and show that nonlinearity of the transport cost function yields rich welfare implications.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 72 (2005)
Issue (Month): 1 (July)
Find related papers by JEL classification:
- R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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- Ricardo Biscaia & Isabel Mota, 2011.
"Models of Spatial Competition: a Critical Review,"
FEP Working Papers
411, Universidade do Porto, Faculdade de Economia do Porto.
- Takanori Ago, 2013. "Demand creation and location: a variable consumer-distribution approach in spatial competition," The Annals of Regional Science, Springer, vol. 51(3), pages 775-792, December.
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- Toshihiro Matsumura & Noriaki Matsushima, 2012. "Spatial Cournot competition and transportation costs in a circular city," The Annals of Regional Science, Springer, vol. 48(1), pages 33-44, February.
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