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A comment on mixed oligopoly spatial model: the non-uniform consumer distribution

Author

Listed:
  • Jie Shuai

    (Zhongnan University of Economics and Law)

Abstract

We allow a general (non-uniform) consumer distribution in a mixed duopoly Hotelling model. We characterize respective conditions under which socially optimal pricing and location are achieved. We find that, while the condition for socially optimal pricing is fairly general, that for a socially optimal location is much more restrictive. Consequently, using a public firm to regulate a market may continue to yield a socially optimal price, but not the socially optimal location. This implies that privatization of the public firm may be desirable.

Suggested Citation

  • Jie Shuai, 2017. "A comment on mixed oligopoly spatial model: the non-uniform consumer distribution," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(1), pages 57-63, April.
    • Handle: RePEc:spr:etbull:v:5:y:2017:i:1:d:10.1007_s40505-016-0101-4
    DOI: 10.1007/s40505-016-0101-4
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    References listed on IDEAS

    as
    1. Jie Shuai, 2016. "Mixed Duopoly with Subcontracting," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(1), pages 37-49, January.
    2. Rabah Amir & Giuseppe Feo, 2014. "Endogenous timing in a mixed duopoly," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(3), pages 629-658, August.
    3. Inoue, Tomohiro & Kamijo, Yoshio & Tomaru, Yoshihiro, 2009. "Interregional mixed duopoly," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 233-242, March.
    4. Noriaki Matsushima & Toshihiro Matsumura, 2003. "Mixed oligopoly and spatial agglomeration," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 62-87, February.
    5. Isabel Grilo, 1994. "Mixed Duopoly under Vertical Differenciation," Annals of Economics and Statistics, GENES, issue 33, pages 91-112.
    6. Oscar J Cárdenas, 2007. "Mixed oligopoly and spatial agglomeration: a comment," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 340-346, February.
    7. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991. "Mixed oligopoly with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 43-53, March.
    8. Oscar J Cárdenas, 2007. "Mixed oligopoly and spatial agglomeration: a comment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 40(1), pages 340-346, February.
    9. repec:adr:anecst:y:1994:i:33:p:07 is not listed on IDEAS
    10. Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January.
    11. Grilo, I., 1994. "Mixed duopoly under vertical differentiation," LIDAM Reprints CORE 1115, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. Toshihiro Matsumura & Noriaki Matsushima, 2004. "Endogenous Cost Differentials between Public and Private Enterprises: A Mixed Duopoly Approach," Economica, London School of Economics and Political Science, vol. 71(284), pages 671-688, November.
    13. Minoru Kitahara & Toshihiro Matsumura, 2013. "Mixed Duopoly, Product Differentiation And Competition," Manchester School, University of Manchester, vol. 81(5), pages 730-744, September.
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    Cited by:

    1. Zhou, Yanju & Che, Yuan, 2021. "Research on Government Logistics Subsidies for Poverty Alleviation with Non-uniform Distribution of Consumers," Omega, Elsevier, vol. 104(C).
    2. Raúl Bajo-Buenestado, 2021. "Market prices, spatial distribution of consumers and firms’ optimal locations in a linear city," Empirical Economics, Springer, vol. 61(1), pages 443-467, July.

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    More about this item

    Keywords

    Mixed duopoly; Spatial competition; Non-uniform distribution; Social welfare;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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