Advanced Search
MyIDEAS: Login

How demand affects optimal prices and product differentiation

Contents:

Author Info

  • Alessandra Chirco

    ()

  • Luca Lambertini

    ()

  • Fabio Zagonari

    ()

Abstract

We investigate the bearings of the level of demand on firms’ optimal locations and prices in a linear model of spatial differentiation with quadratic disutility of transportation. We show that demand affects both optimal prices and optimal locations of firms, in that firms increase product differentiation only if demand is high enough to trigger a price war. Otherwise, the non-cooperative duopoly equilibrium is observationally equivalent to the monopoly optimum with the same number of products. Contrary to the linear transportation cost case, optimal prices are everywhere increasing in the reservation price. Copyright Springer-Verlag Berlin/Heidelberg 2003

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Springer in its journal Papers in Regional Science.

Volume (Year): 82 (2003)
Issue (Month): 4 (November)
Pages: 555-568

as in new window
Handle: RePEc:spr:presci:v:82:y:2003:i:4:p:555-568

Contact details of provider:
Web page: http://link.springer.de/link/service/journals/10110/index.htm

Order Information:
Web: http://link.springer.de/orders.htm

Related research

Keywords: Location; reservation price; product differentiation;

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Marcella Scrimitore, 2003. "Symmetric and Asymmetric Equilibria in a Spatial Duopoly," ERSA conference papers ersa03p194, European Regional Science Association.
  2. Gori, Giuseppe Francesco & Lambertini, Luca, 2013. "Trade liberalisation between asymmetric countries with environmentally concerned consumers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 549-560.
  3. Eleftherios Zacharias, 2009. "Firm entry, product repositioning and welfare," EERI Research Paper Series EERI_RP_2009_17, Economics and Econometrics Research Institute (EERI), Brussels.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:spr:presci:v:82:y:2003:i:4:p:555-568. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.