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Imperfect competition and congestion in the City

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Author Info

  • Andre de Palma

    (Université de Cery Pontoise, France - CORE, UCL, Belgium)

  • Stef Proost

    ()
    (K.U.Leuven-Center for Economic Studies - CORE, UCL, Belgium)

Abstract

This paper presents a spatial model to study imperfect competition with congestion. The model is used to examine the price and wage setting of subcenters of a city. Residents live in a city while they shop and work in subcentres. Each subcenter o.ers one di.erentiated product and one di.erentiated workplace. Shopping and commuting from the city to the subcenter requires the use of transport infrastructure that can be congested. We show the existence of a Nash equilibrium in prices and wages and analyse the welfare impacts of congestion charging and infrastructure policies. This paper generalises the literature on imperfect competition with di.erentiated products as well as the literature on congestion pricing with imperfect competition.

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Bibliographic Info

Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0409.

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Length: 38 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:ete:etewps:ete0409

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Keywords: Road Pricing; Product Di.erentiation; Location Theory; New Economic Geography; Congestion.;

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References

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  1. Victor Ginsburgh & Michiel Keyzer, 2002. "The structure of applied general equilibrium models," ULB Institutional Repository 2013/3313, ULB -- Universite Libre de Bruxelles.
  2. Richard Arnott & Alex Anas & Kenneth Small, 1997. "Urban Spatial Structure," Boston College Working Papers in Economics 388., Boston College Department of Economics.
  3. Anderson, Simon P & de Palma, Andre, 2001. "Product Diversity in Asymmetric Oligopoly: Is the Quality of Consumer Goods Too Low?," Journal of Industrial Economics, Wiley Blackwell, vol. 49(2), pages 113-35, June.
  4. repec:cup:cbooks:9780521801386 is not listed on IDEAS
  5. Anderson, S. P. & De Palma, A. & Nesterov, Y., . "Oligopolistic competition and the optimal provision of products," CORE Discussion Papers RP -1179, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. repec:cup:cbooks:9780521805247 is not listed on IDEAS
  7. Anderson, Simon P. & de Palma, Andre, 1999. "Reverse discrete choice models," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 745-764, November.
  8. Kurt Van Dender, 2005. "Duopoly prices under congested access," Journal of Regional Science, Wiley Blackwell, vol. 45(2), pages 343-362.
  9. Edelson, Noel M, 1971. "Congestion Tolls Under Monopoly," American Economic Review, American Economic Association, vol. 61(5), pages 873-82, December.
  10. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-79, March.
  11. Anas, Alex & Kim, Ikki, 1996. "General Equilibrium Models of Polycentric Urban Land Use with Endogenous Congestion and Job Agglomeration," Journal of Urban Economics, Elsevier, vol. 40(2), pages 232-256, September.
  12. Van Dender, Kurt, 2005. "Duopoly Prices Under Congested Access," University of California Transportation Center, Working Papers qt7xw8c3fn, University of California Transportation Center.
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