Optimal Transportation Policy with Strategic Locational Choice
AbstractThis paper presents a model of strategic locational choice by duopolistic firms in an urban area where consumer locations are endogenous and where a public facility is exogenously fixed. A welfare analysis taking their strategic behaviour into account is conducted. It is shown that the firms' equilibrium locations often differ from the optimal locations which, in contrast to standard location theory, are not at the quartiles of the urban area. Corrective transportation taxes or subsidies can be used to support an optimal locational structure. Changes in transportation costs require unit-for-unit offsetting changes in transportation taxes or subsidies.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 933.
Date of creation: Apr 1994
Date of revision:
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Other versions of this item:
- Thisse, Jacques-Francois & Wildasin, David E., 1995. "Optimal transportation policy with strategic locational choice," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 395-410, August.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - General
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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