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Optimal Differentiation and Spatial Competition: The Spokes Model with Product Delivery

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Author Info
Carlo Reggiani

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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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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 09/13.

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Handle: RePEc:yor:yorken:09/13

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Related research
Keywords: spokes model; discrimination; optimal location;

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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
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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  1. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
  3. Kats, Amoz, 1987. "Location-price equilibria in a spatial model of discriminatory pricing," Economics Letters, Elsevier, vol. 25(2), pages 105-109. [Downloadable!] (restricted)
  4. 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.
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  5. Yongmin Chen & Michael H. Riordan, 2003. "Vertical Integration, Exclusive Dealing, and Ex Post Cartelization," Discussion Papers 0203-13, Columbia University, Department of Economics. [Downloadable!]
  6. Jonathan Vogel, 2009. "Spatial Price Discrimination with Heterogeneous Firms," NBER Working Papers 14978, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Thisse, Jacques-Francois & Vives, Xavier, 1988. "On the Strategic Choice of Spatial Price Policy," American Economic Review, American Economic Association, vol. 78(1), pages 122-37, March. [Downloadable!] (restricted)
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  8. 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. [Downloadable!] (restricted)
  9. Juan J. Ganuza & Esther Hauk, 2002. "Allocating Ideas: Horizontal Competition in Tournaments," Economics Working Papers 594, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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This page was last updated on 2009-12-1.

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