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Winners and Losers in Spatial Duopoly Markets; the Relevance of a Value Transfer Approach


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  • Frans Bal

    (Vrije Universiteit Amsterdam)

  • Peter Nijkamp

    (Vrije Universiteit Amsterdam)


The effect of economic behaviour of different actors on the size of a market area is a classical subject of study in regional economics and over the years many studies have been published on this subject. Regional market differences are not only relevant in (location-) allocation theory, but they may also offer intriguing research opportunities for value transfer analysis. In our study a fresh look will be taken at the key forces determining the size of a market area and its implications and possibilities for value transfer. We will address in particular the combination of price competition (modelled by using a modified Bertrand duopoly model) and transport costs.In the paper, Hotelling's duopolistic allocation model will act as the basis for further theorizing. The reasons for the emergence of regional duopoly markets will be investigated by using the willingness-to-pay of households. A modified duopolistic model to analyze also the effects of choice behaviour under conditions of congestion will be placed in the context of earlier research on these types of models, while its implications for value transfer will be traced.Throughout the paper, a strictly formal approach will be adopted in order to identify the general conditions under which value transfer is feasible.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 98-004/3.

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Date of creation: 16 Jan 1998
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Handle: RePEc:dgr:uvatin:19980004

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  1. Nijkamp, Peter & Pepping, Gerard, 1997. "A meta-approach to investigate the variance in transport cost elasticities: a cross-national European comparison," Serie Research Memoranda 0071, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  2. Timothy J. Kehoe, 1990. "Computation and Multiplicity of Equilibria," Discussion Paper Serie A 309, University of Bonn, Germany.
  3. Frans Bal & Peter Nijkamp, 1997. "Exogenous and Endogenous Spatial Growth Models," Tinbergen Institute Discussion Papers 97-022/3, Tinbergen Institute.
  4. Carson, Richard T. & Flores, Nicholas E. & Martin, Kerry M. & Wright, Jennifer L., 1995. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148793, Australian Agricultural and Resource Economics Society.
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Cited by:
  1. Bal, Frans & Nijkamp, Peter, 1998. "A new scientific challenge in economics : theory building via synthesis," Serie Research Memoranda 0056, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.


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