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Spatial Price Discrimination with Heterogeneous Firms

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  • Jonathan Vogel

Abstract

In this paper we present and solve a three-stage game of entry, location, and pricing in a spatial price discrimination framework with arbitrarily many heterogeneous firms. We provide a unique characterization of all equilibria without imposing restrictions on the distribution of marginal costs.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14978.

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Date of creation: May 2009
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Publication status: published as Jonathan Vogel, 2011. "Spatial Price Discrimination with Heterogeneous Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 59(4), pages 661-676, December.
Handle: RePEc:nbr:nberwo:14978

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  1. McLEOD, W.B. & NORMAN, G. & THISSE, J.-F., . "Price discrimination and equilibrium in monopolistic competition," CORE Discussion Papers RP -828, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Chad Syverson, 2004. "Market Structure and Productivity: A Concrete Example," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1181-1222, December.
  3. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
  4. Hamilton, J.H. & Macleod, W.P. & Thisse, J.F., 1988. "Spatial Competition And The Core," Papers 88-6, Florida - College of Business Administration.
  5. HAMILTON, Jonathan H. & THISSE, Jacques-François & WESKAMP, Anita, . "Spatial discrimination. Bertrand vs. Cournot in a model of location choice," CORE Discussion Papers RP -846, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February.
  7. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
  8. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
  9. Lederer, Phillip J & Hurter, Arthur P, Jr, 1986. "Competition of Firms: Discriminatory Pricing and Location," Econometrica, Econometric Society, vol. 54(3), pages 623-40, May.
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Cited by:
  1. Raphael Anton Auer & Philip Ulrich Sauré, 2011. "Spatial Competition in Quality, Demand-Induced Innovation, and Schumpeterian Growth," Working Papers 2011-10, Swiss National Bank.
  2. Carlo Reggiani, . "Optimal Differentiation and Spatial Competition: The Spokes Model with Product Delivery," Discussion Papers 09/13, Department of Economics, University of York.

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