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Spatial dispersion in cournot competition

Author

Listed:
  • José María Chamorro Rivas

    (Departamento de Economía Aplicada, Universidad de Vigo, Campus Lagoas-Marcosende, 36200 Vigo , Spain)

Abstract

This paper considers the spatial model used by Anderson and Neven (1991) to study firms' decisions on locations without restricting the consumers' reservation price. We note that the pattern of locations varies as the reservation price for a fixed transportation rate decreases. For a high enough reservation price, we find Anderson and Neven (1991)'s result where firms group at the center of the market and serve all consumers. As the reservation price falls, firms start to move away from each other, increasing the quantities shipped to the consumers close to their locations.

Suggested Citation

  • José María Chamorro Rivas, 2000. "Spatial dispersion in cournot competition," Spanish Economic Review, Springer;Spanish Economic Association, vol. 2(2), pages 145-152.
    • Handle: RePEc:spr:specre:v:2:y:2000:i:2:p:145-152
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    Citations

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    Cited by:

    1. Ching‐Chih Tseng & Wen‐Jung Liang & Kuang‐Cheng Andy Wang, 2010. "Spatial agglomeration with vertical differentiation," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 841-858, November.
    2. Stefano Colombo, 2011. "Spatial price discrimination in the unidirectional Hotelling model with elastic demand," Journal of Economics, Springer, vol. 102(2), pages 157-169, March.
    3. Ricardo Biscaia & Isabel Mota, 2013. "Models of spatial competition: A critical review," Papers in Regional Science, Wiley Blackwell, vol. 92(4), pages 851-871, November.
    4. Stefano Colombo, 2014. "Fee versus royalty licensing in spatial Cournot competition," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(3), pages 859-879, May.
    5. Kai Andree, 2013. "Collusion in Spatially Separated Markets with Quantity Competition," Journal of Industry, Competition and Trade, Springer, vol. 13(3), pages 309-318, September.
    6. Chen, Chin-Sheng & Lai, Fu-Chuan, 2008. "Location choice and optimal zoning under Cournot competition," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 119-126, March.
    7. Eric Langlais & Andreea Cosnita-Langlais, 2022. "Incentives to differentiate under environmental liability laws : Product customization and precautionary effort," EconomiX Working Papers 2022-20, University of Paris Nanterre, EconomiX.
    8. Wen-Chung Guo & Fu-Chuan Lai, 2015. "Spatial Cournot competition in a linear–circular market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 819-834, May.
    9. repec:ebl:ecbull:v:12:y:2008:i:22:p:1-5 is not listed on IDEAS
    10. N?stor Duch Brown, 2007. "The empirics of spatial competition: evidence from european regions," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2007(1), pages 35-60.
    11. Eric Langlais & Andreea Cosnita-Langlais, 2022. "Endogenous market structures, product liability, and the scope of product differentiation," Working Papers hal-04159801, HAL.
    12. Torbenko, A., 2015. "Linear City Models: Overview and Typology," Journal of the New Economic Association, New Economic Association, vol. 25(1), pages 12-38.
    13. Stefano Colombo, 2016. "Location choices with a non-linear demand function," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 215-226, March.
    14. Chia-Hung Sun & Jyh-Fa Tsai & Fu-Chuan Lai, 2017. "Spatial Cournot competition in a circular city with more than two dispatches," The Japanese Economic Review, Japanese Economic Association, vol. 68(4), pages 413-442, December.
    15. repec:ebl:ecbull:v:12:y:2007:i:1:p:1-7 is not listed on IDEAS
    16. Wen-Jung Liang & Yen-Ju Lin & Hong Hwang, 2012. "Heterogeneous duopoly, spatially discriminatory pricing, and optimal location," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 845-860, December.
    17. Ricardo Biscaia & Paula Sarmento, 2013. "Location Decisions in a Natural Resource Model of Cournot Competition," FEP Working Papers 509, Universidade do Porto, Faculdade de Economia do Porto.
    18. Qiang Wang & Qi Chen, 2008. "Cournot competition and location choice with wage bargaining," Economics Bulletin, AccessEcon, vol. 12(22), pages 1-5.
    19. Chia-Hung Sun, 2014. "Spatial Cournot Competition in a Linear City with Directional Delivery Constraints," The Japanese Economic Review, Japanese Economic Association, vol. 65(3), pages 344-374, September.
    20. Hamid Hamoudi & María J. Moral, 2017. "Green zoning regulation under price discrimination," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 35(1), pages 151-171.
    21. Stefano Colombo, 2016. "A Model of Three Cities," International Regional Science Review, , vol. 39(4), pages 386-416, October.
    22. Chia-Hung Sun & Jyh-Fa Tsai & Fu-Chuan Lai, 2017. "Spatial Cournot Competition in a Circular City with More than Two Dispatches," The Japanese Economic Review, Springer, vol. 68(4), pages 413-442, December.

    More about this item

    Keywords

    Price discrimination; cournot competition; spatial dispersion; duopoly; subgame perfect equilibrium;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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