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Urban Public Facility Location, Multipurpose Trips and Spatial Competition: equilibrium and welfare analysis

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Author Info
Baudewyns

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Abstract

We study the impact of the urban location of one single public facility on spatial competition ` la Hotelling. If transportation costs are very low compared to the value of the public service then both firms tacitly choose the facility location without moderation of price competition, in contrast to mainstream results in the literature. In this event, minimum differentiation is efficient. For intermediate values of the relative transportation rate, inefficient partially-dispersed equilibria emerge with one firm at the facility site while its competitor locates at one end of the linear city. We also analyze the welfare impacts of changes, successively, in the facility location and the transportation rate, taking into account firms relocations.

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File URL: http://fesrvsd.fe.unl.pt/WPFEUNL/WP2001/wp400.pdf
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Publisher Info
Paper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number wp400.

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Length: 38 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:unl:unlfep:wp400

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Web page: http://www.fe.unl.pt

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Related research
Keywords: public facility; multipurpose trip; full agglomeration; partial dispersion; optimal location;

Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
R32 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Other Production and Pricing Analysis

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  1. Thisse, Jacques-Francois & Wildasin, David E., 1995. "Optimal transportation policy with strategic locational choice," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 395-410, August. [Downloadable!] (restricted)
    Other versions:
  2. Tabuchi, Takatoshi & Thisse, Jacques-Francois, 1995. "Asymmetric equilibria in spatial competition," International Journal of Industrial Organization, Elsevier, vol. 13(2), pages 213-227. [Downloadable!] (restricted)
  3. Combes, Pierre-Philippe & Linnemer, Laurent, 2000. "Intermodal competition and regional inequalities," Regional Science and Urban Economics, Elsevier, vol. 30(2), pages 131-184, March. [Downloadable!] (restricted)
  4. Revelle, Charles, 1987. "Urban public facility location," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 27, pages 1053-1096 Elsevier. [Downloadable!] (restricted)
  5. Thisse, Jacques-Francois & Wildasin, David E., 1992. "Public facility location and urban spatial structure : Equilibrium and welfare analysis," Journal of Public Economics, Elsevier, vol. 48(1), pages 83-118, June. [Downloadable!] (restricted)
    Other versions:
  6. Lambertini, Luca, 1997. "Unicity of the equilibrium in the unconstrained Hotelling model," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 785-798, November. [Downloadable!] (restricted)
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