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Harmonic Symmetries of Imperfect Competition on Circular City

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  • Hennessy, David A.
  • Lapan, Harvey E.

Abstract

Taking location as given, we study imperfect competition on a circular city. In Bertrand oligopoly, we identify price harmonics as a function of firm unit costs and locations. The sum of oligopoly profits is larger when costs and/or locations are more dispersed in the ムdihedralmajorizationメ sense. This also tends to be the case in whichprices aremore variable. We study how phase shifts between cost parameters and inter-firm distance parameters change production and oligopoly profits. An exact characterization of production patterns is developed in terms of the eigenvalues for what we call the price harmonics matrix. The same techniques are applied to Cournot oligopoly with spatial externalities on circular city. Solutions are compared with first-best. Production patterns can differ markedly when cost spillovers are negative.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12551.

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Date of creation: 23 Mar 2006
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Publication status: Published in Journal of Mathematical Economics, January 2009, vol. 45, pp. 124-146
Handle: RePEc:isu:genres:12551

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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  14. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
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