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Cournot competition in spatial markets : some complementary results on complementarity

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Author Info
Andrea Cosnita () (EUREQua)

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Abstract

We study location equilibria for Cournot oligopolies selling complementary goods. For a single-store triopoly, we prove that the circular market also yields partial diamentrical dispersion besides total agglomeration. We turn to multi-plant duopolies and in contrast to other contributions on the topic, we allow firms to sell more than one product. We confirm the intuition that total agglomeration of outlets is always an equilibrium, whatever the market shape. However, the circular case also exhibits intra-firm agglomeration and inter-firm equal distance dispersion. This is a pattern never before obtained, entirely due to the assumption of intra-firm product complementarity.

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Publisher Info
Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number v05061.

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Length: 21 pages
Date of creation: Oct 2005
Date of revision: Apr 2006
Handle: RePEc:mse:wpsorb:v05061

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Related research
Keywords: Complementary products; multi-store competition; spatial Cournot model.;

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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
R32 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Other Production and Pricing Analysis

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  1. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-50, September. [Downloadable!] (restricted)
  2. Kats, Amoz, 1995. "More on Hotelling's stability in competition," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 89-93, March. [Downloadable!] (restricted)
  3. Andreea Cosnita, 2005. "Horizontal mergers in the circular city: a note," Economics Bulletin, Economics Bulletin, vol. 12(7), pages 1-10. [Downloadable!]
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  4. Chia-Ming Yu & Fu-Chuan Lai, 2003. "Cournot competition in spatial markets: Some further results," Economics of Governance, Springer, vol. 82(4), pages 569-580, November. [Downloadable!] (restricted)
  5. Chamorro-Rivas, Jose-Maria, 2000. "Plant proliferation in a spatial model of Cournot competition," Regional Science and Urban Economics, Elsevier, vol. 30(5), pages 507-518, September. [Downloadable!] (restricted)
  6. Daisuke Shimizu & Toshihiro Matsumura, 2003. "Equilibria for circular spatial Cournot markets," Economics Bulletin, Economics Bulletin, vol. 18(1), pages 1-9. [Downloadable!]
  7. Shimizu, Daisuke, 2002. "Product differentiation in spatial Cournot markets," Economics Letters, Elsevier, vol. 76(3), pages 317-322, August. [Downloadable!] (restricted)
  8. Hamilton, Jonathan H. & Thisse, Jacques-Francois & Weskamp, Anita, 1989. "Spatial discrimination : Bertrand vs. Cournot in a model of location choice," Regional Science and Urban Economics, Elsevier, vol. 19(1), pages 87-102, February. [Downloadable!] (restricted)
  9. Pal, Debashis, 1998. "Does Cournot competition yield spatial agglomeration?," Economics Letters, Elsevier, vol. 60(1), pages 49-53, July. [Downloadable!] (restricted)
  10. Gupta, Barnali & Lai, Fu-Chuan & Pal, Debashis & Sarkar, Jyotirmoy & Yu, Chia-Ming, 2004. "Where to locate in a circular city?," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 759-782, June. [Downloadable!] (restricted)
  11. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February. [Downloadable!] (restricted)
  12. Matsushima, Noriaki, 2001. "Cournot competition and spatial agglomeration revisited," Economics Letters, Elsevier, vol. 73(2), pages 175-177, November. [Downloadable!] (restricted)
  13. Chia-Ming Yu & Fu-Chuan Lai, 2003. "Cournot competition in spatial markets: Some further results," Papers in Regional Science, Springer, vol. 82(4), pages 569-580, November. [Downloadable!] (restricted)
  14. Anderson, Simon P & Neven, Damien J, 1991. "Cournot Competition Yields Spatial Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 793-808, November. [Downloadable!] (restricted)
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