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Spatial price discrimination in the spokes model

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  • Carlo Reggiani

Abstract

The spokes model is a recent framework to study n-firms spatial competition. In a spatial framework firms delivering their product can price discriminate with respect to consumers’ location. Conditions for the existence of a price-location equilibrium of the spokes model with delivered product are established in both the case where there are as many firms as spokes and in the case not all spokes are occupied. The equilibrium outcome may be interpreted as one firm supplying a "general purpose product" while others focusing on their "niche".

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Bibliographic Info

Paper provided by Economics, The University of Manchester in its series The School of Economics Discussion Paper Series with number 1207.

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Date of creation: 2012
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Handle: RePEc:man:sespap:1207

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  1. Hendel, Igal & de Figueiredo, John Neiva, 1997. "Product differentiation and endogenous disutility," International Journal of Industrial Organization, Elsevier, vol. 16(1), pages 63-79, November.
  2. Doraszelski, Ulrich & Draganska, Michaela, 2003. "Market Segmentation Strategies of Multiproduct Firms," Research Papers 1827, Stanford University, Graduate School of Business.
  3. Jonathan Vogel, 2009. "Spatial Price Discrimination with Heterogeneous Firms," NBER Working Papers 14978, National Bureau of Economic Research, Inc.
  4. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
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  6. Greenhut, M L & Ohta, H, 1972. "Monopoly Output Under Alternative Spatial Pricing Techniques," American Economic Review, American Economic Association, vol. 62(4), pages 705-13, September.
  7. Kats, Amoz, 1987. "Location-price equilibria in a spatial model of discriminatory pricing," Economics Letters, Elsevier, vol. 25(2), pages 105-109.
  8. Caminal, Ramon & Claici, Adina, 2007. "Are loyalty-rewarding pricing schemes anti-competitive?," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 657-674, August.
  9. THISSE, Jacques-François & VIVES, Xavier, . "On the strategic choice of spatial price policy," CORE Discussion Papers RP -793, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Juan J. Ganuza & Esther Hauk, 2002. "Allocating ideas: Horizontal competition in tournaments," Economics Working Papers 594, Department of Economics and Business, Universitat Pompeu Fabra.
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