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Regional competition for the location of new facilities

Author

Listed:
  • Thomas Christiaans

    (Department of Economics, University of Siegen, D-57068 Siegen, Germany)

Abstract

A model of interregional competition for the location of new facilities is analyzed as a differential game. Two regions try to enhance their attraction by making concessions to a location decision maker in order to raise the probability that a new facility will be located in a specific region. The prospective benefits and costs of exerting influence are decisive for the final outcomes of the model. The open-loop (and feedback) Nash equilibrium solution is inefficient in comparison to the cooperative solution of joint benefit maximization of both regions.

Suggested Citation

  • Thomas Christiaans, 2002. "Regional competition for the location of new facilities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(4), pages 645-661.
    • Handle: RePEc:spr:anresc:v:36:y:2002:i:4:p:645-661
    Note: Received: May 2000/Accepted: December 2001
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    More about this item

    JEL classification:

    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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