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Endogenous R&D spillovers and locational choice with discriminatory pricing

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  • Claudio Piga

    (University of Nottingham, Nottingham, UK)

  • Joanna Poyago-Theotoky

    (University of St. Andrews, Fife, St. Andrews, UK)

Abstract

We present a model of spatial price discrimination where R&D spillovers are endogenous as they depend on firms' location. We establish that both the distance between locations and R&D efforts are an increasing function of the transportation cost coefficient and show that there is a continuum of cases where firms will choose an intermediate location. The managerial implications from the model are discussed using examples of marketing behavior by Internet retailers. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1137
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 25 (2004)
Issue (Month): 3 ()
Pages: 157-161

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Handle: RePEc:wly:mgtdec:v:25:y:2004:i:3:p:157-161

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  1. Erik Brynjolfsson & Michael D. Smith, 2000. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Management Science, INFORMS, INFORMS, vol. 46(4), pages 563-585, April.
  2. Claudio A. Piga, 1998. "A Dynamic Model of Advertising and Product Differentiation," Review of Industrial Organization, Springer, Springer, vol. 13(5), pages 509-522, October.
  3. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, American Economic Association, vol. 86(3), pages 630-40, June.
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