A Comment on Location and Industrial Efficiency with Free Entry
AbstractWe consider Gee's model of industrial location and prove analytically that, given Gee's assumption of price discrimination, firms always wish to locate in the centres of their markets. This contrasts the result for mill-price-plus-transport-cost pricing where firm locate in the centres of interior markets, but not in the centres of peripheral markets. We also show that other of Gee's results depend on his omission of a key equilibrium condition with respect to the relocation of firms already in the market. We reassert the propositions challenged by Gee, that pricing behaviour and the existence or non-existence of boundaries to the whole market critically affect the results derived from a broad class of industrial location models.
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Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 93 (1979)
Issue (Month): 3 (August)
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Other versions of this item:
- B. Curtis Eaton & Richard G. Lipsey, 1977. "A Comment on Location and Industrial Efficiency with Free Entry," Working Papers 269, Queen's University, Department of Economics.
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- George Norman & Jacques-François Thisse, 1998.
"Technology Choice and Market Structure: Strategic Aspects of Flexible Manufacturing,"
Discussion Papers Series, Department of Economics, Tufts University
9808, Department of Economics, Tufts University.
- Norman, George & Thisse, Jacques-Francois, 1999. "Technology Choice and Market Structure: Strategic Aspects of Flexible Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 47(3), pages 345-72, September.
- NORMAN, George & THISSE, Jacques-François, 1996. "Technology choice and market structure : strategic aspects of flexible manufacturing," CORE Discussion Papers 1996059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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