Advanced Search
MyIDEAS: Login to save this paper or follow this series

Spatial Competition within Urban Areas: Hotelling and Bertrand Reconciled

Contents:

Author Info

  • Didier Baudewyns

    (Universidade Nova de Lisboa)

Abstract

In this paper, we assume the existence of a distribution of urban amenities having its maximum at the city center. These amenities are viewed as a surrogate for all kinds of opportunities, economic, social, cultural, that consumers encounter within urban areas. Using the Hotelling model, we study the impact of these amenities on independent location and pricing decisions of duopolists. Consumers patronize the firm where the amount of outside opportunities is larger, ceteris paribus. If this demand externality is strong at the city center then minimum differentiation occurs without moderation of price competition, in contrast to mainstream results in the literature. For intermediate values of the ratio of transportation cost to spatial concentration of amenities, firms tacitly play an asymmetric equilibrium with one firm near (or at) the midpoint and its rival at a more suburban location. This causes intra-urban inequalities since some consumers are induced to patronize the decentralized firm in the vicinity of which they encounter fewer urban life opportunities. Yet, if amenities are congestible (public goods) then the city planner optimally sets an intermediate value of the relative transportation cost, inducing firms to play an asymmetric equilibria with only one firm at the midpoint and its rival at a suburban site.

Download Info

If 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.
File URL: http://fmwww.bc.edu/RePEc/es2000/1561.pdf
File Function: main text
Download Restriction: no

Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1561.

as in new window
Length:
Date of creation: 01 Aug 2000
Date of revision:
Handle: RePEc:ecm:wc2000:1561

Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Email:
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:1561. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.