This paper considers a model of oligopolistic competition and locational choice that incorporates the notion of regional industrial systems. Firms play a non cooperative game where the strategy set of firms is given by a set of existing industrial districts. Each firm is distinguished by its "stand alone" district-dependant marginal cost. However, if other firms locate in the same district, its stand alone cost is reduced by a factor that depends on the number of firms in the district. We show that the location game yields a Nash equilibrium in pure strategies.
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Paper provided by Universite Aix-Marseille III in its series G.R.E.Q.A.M. with number
99a02.
Length: 32 pages Date of creation: 1999 Date of revision: Handle: RePEc:fth:aixmeq:99a02
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Find related papers by JEL classification: C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Existence and Stability Conditions of Equilibrium L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets R1 - Urban, Rural, and Regional Economics - - General Regional Economics