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Endogenous R&D spillovers and locational choice with discriminatory pricing

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Author Info
Claudio Piga (University of Nottingham, Nottingham, UK)
Joanna Poyago-Theotoky (University of St. Andrews, Fife, St. Andrews, UK)

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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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Publisher 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. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June. [Downloadable!] (restricted)
  2. Michael Smith & Erik Brynjolfsson, 1999. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Computing in Economics and Finance 1999 1022, Society for Computational Economics.
  3. Claudio A. Piga, 1998. "A Dynamic Model of Advertising and Product Differentiation," Review of Industrial Organization, Springer, vol. 13(5), pages 509-522, October. [Downloadable!]
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This page was last updated on 2009-12-30.

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