Imperfect Competition and Congestion in a City with asymmetric subcenters
AbstractThis paper develops a model for the monopolistic competition of subcenters for the shoppers and workers of a central city. The model is an extension of the de Palma & Proost (2004) model that is limited to the symmetric case. Inhabitants of a CBD can choose one of the subcenters to buy a differentiated product and choose one of the subcenters to supply differentiated labour. The subcenters compete in prices and wages and the access to the subcenters can be congested. The short term and free entry equilibria are studied. As general properties are rare in the non-symmetrical monopolistic competition case, this paper draws more on numerical examples than on hard theorems. Starting from a symmetric base case, the paper explores the effects on welfare and number of subcenters of introducing diversity in the distances to the subcenter, quality of the subcenters, congestion and attractiveness of the subcenter as workplace. The paper shows cases where asymmetry can increase welfare and where the order in which firms enter the market matters for the equilibrium outcome.
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Bibliographic InfoPaper 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 ete0411.
Length: 21 pages
Date of creation: Aug 2004
Date of revision:
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Road Pricing; Product Di.erentiation; Location Theory; New Economic Geography; Congestion.;
Other versions of this item:
- DE PALMA, André & DUNKERLEY, Fay & PROOST, Stef, . "Imperfect competition and congestion in a city with asymmetric subcentres," CORE Discussion Papers RP -1884, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-02 (All new papers)
- NEP-GEO-2004-12-02 (Economic Geography)
- NEP-URE-2004-12-02 (Urban & Real Estate Economics)
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.:
- 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.
- 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.
- Anderson,S.P. & de Palma,A., 1995. "Product Diversity in Asymmetric Oligopoly:Is the Quality of Consumer Goods Too Low?," Papers 9521, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
- Simon P. Anderson & André de Palma, 2000. "Product Diversity in Asymmetric Oligopoly: Is the Quality of Consumer Goods too Low?," Virginia Economics Online Papers 349, University of Virginia, Department of Economics.
- Andre de Palma & Dunkerley Fay, 2006.
"Trip Chaining: Who Wins Who Loses?,"
Energy, Transport and Environment Working Papers Series
ete0605, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
- André de Palma & Fay Dunkerley & Stef Proost, 2006. "Trip chaining: who wins who loses?," Center for Economic Studies - Discussion papers ces0607, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- André De Palma & Fay Dunkerley & Stef Proost, 2005. "Trip chaining - who wins, who loses?," ERSA conference papers ersa05p496, European Regional Science Association.
- André De Palma & Fay Dunkerley & Stef Proost, 2008. "Trip chaining: Who wins who loses?," Working Papers hal-00348451, HAL.
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