Spatial Competition with Heterogeneous Firms
AbstractI model endogenous horizontal and vertical product differentiation with arbitrarily many heterogeneous firms. Firms are asymmetric in that they differ in their marginal costs. I prove that under an equilibrium refinement, all economically relevant firm outcomes are uniquely determined across all strict subgame perfect Nash equilibria. There are two central results. First, a firm's price, market share, and profit are independent of its neighbors' marginal costs, conditional on the average marginal cost in the market. Second, more productive firms are more isolated, all else equal. In particular, the distance between two firms is strictly decreasing in their average marginal cost. (c) 2008 by The University of Chicago. All rights reserved..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 116 (2008)
Issue (Month): 3 (06)
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JPE/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Meza, Sergio & Tombak, Mihkel, 2009. "Endogenous location leadership," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 687-707, November.
- Kevin Wiseman, 2010. "Location, Productivity, and Trade," 2010 Meeting Papers 671, Society for Economic Dynamics.
- Okubo, Toshihiro & Picard, Pierre M & Thisse, Jacques-François, 2008.
"The Spatial Selection of Heterogeneous Firms,"
CEPR Discussion Papers
6978, C.E.P.R. Discussion Papers.
- Okubo, Toshihiro, 2010. "The spatial selection of heterogeneous firms," Open Access publications from UniversitÃ© catholique de Louvain info:hdl:2078.1/33470, Université catholique de Louvain.
- Toshihiro Okubo & Pierre M. Picard & Jacques-François Thisse, 2008. "The spatial selection of heterogeneous firms," CREA Discussion Paper Series 08-16, Center for Research in Economic Analysis, University of Luxembourg.
- Toshihiro Okubo & Pierre M. Picard & Jacques-François Thisse, 2008. "The spatial selection of heterogeneous firms," Discussion Paper Series 229, Research Institute for Economics & Business Administration, Kobe University.
- OKUBO, Toshihiro & PICARD, Pierre M. & THISSE, Jacques-François, . "The spatial selection of heterogeneous firms," CORE Discussion Papers RP -2257, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Helen Weeds, 2009.
"Superstars and the Long Tail: The impact of technology on market structure in media industries,"
Economics Discussion Papers
669, University of Essex, Department of Economics.
- Weeds, Helen, 2012. "Superstars and the long tail: The impact of technology on market structure in media industries," Information Economics and Policy, Elsevier, vol. 24(1), pages 60-68.
- Weeds, Helen, 2011. "Superstars and the Long Tail: The impact of technology on market structure in media industries," CEPR Discussion Papers 8719, C.E.P.R. Discussion Papers.
- Emilie Dargaud & Carlo Reggiani, 2012.
"On the Price Effects of Horizontal Mergers: A Theoretical Interpretation,"
The School of Economics Discussion Paper Series
1201, Economics, The University of Manchester.
- Emilie Dargaud & Carlo Reggiani, 2012. "On the Price Effects of Horizontal Mergers : A Theoretical Interpretation," Working Papers halshs-00717467, HAL.
- Emilie Dargaud & Carlo Reggiani, 2012. "On the Price Effects of Horizontal Mergers : A Theoretical Interpretation," Working Papers 1222, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Emilie Dargaud & Carlo Reggiani, . "Horizontal Mergers in the Spokes Model," Discussion Papers 09/12, Department of Economics, University of York.
- Mary Amiti & Amit K. Khandelwal, 2009.
"Import Competition and Quality Upgrading,"
NBER Working Papers
15503, National Bureau of Economic Research, Inc.
- Alderighi, Marco & Piga, Claudio A., 2010.
"On cost restrictions in spatial competition models with heterogeneous firms,"
Elsevier, vol. 108(1), pages 40-42, July.
- Marco Alderighi & Claudio A. Piga, 2009. "On cost restrictions in spatial competition models with heterogeneous firms," Discussion Paper Series 2009_09, Department of Economics, Loughborough University, revised Jul 2009.
- Nathan H. Miller, 2008. "Competition When Consumers Value Firm Scope," EAG Discussions Papers 200807, Department of Justice, Antitrust Division.
- DeAngelo, Gregory, 2012. "Making space for crime: A spatial analysis of criminal competition," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 42-51.
- Matthew Beacham, 2012. "The effect of Stackelberg cost reductions on spatial competition with heterogeneous firms," Discussion Papers 12/14, Department of Economics, University of York.
- Sylvain Champonnois, 2009. "Bank Competition and Economic Stability: The Role of Monetary Policy," 2009 Meeting Papers 1118, Society for Economic Dynamics.
- Narajabad, Borghan & Watson, Randal, 2011. "The dynamics of innovation and horizontal differentiation," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 825-842, June.
- Michele Boldrin & Juan C Allamand & David K Levine & Carmine Ornaghi, 2011. "Competition and Innovation," Levine's Working Paper Archive 786969000000000232, David K. Levine.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.