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Firm Mobility and Location Equilibrium

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  • Simon P. Anderson
  • Andre De Palma
  • Gap-Seon Hong

Abstract

Two types of location equilibria are compared. The first one is that of a simultaneous price and location game, the second is that of a two-stage location-then-price game. It is suggested that equilibrium locations are further apart under the second and profits are higher, since firms internalize the harmful price competition effect of moving close to each other. The paper introduces a nonpurchase option into the logit model of spatial competition and the sensitivity of the equilibrium is analyzed.

Suggested Citation

  • Simon P. Anderson & Andre De Palma & Gap-Seon Hong, 1992. "Firm Mobility and Location Equilibrium," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 76-88, February.
    • Handle: RePEc:cje:issued:v:25:y:1992:i:1:p:76-88
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    Citations

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    Cited by:

    1. Webers, H.M., 1994. "Non-uniformities in spatial location models," Research Memorandum FEW 647, Tilburg University, School of Economics and Management.
    2. Hemanta Shrestha & Dennis Heffley, 2003. "Regional Integration and Industrial Location in a Landlocked Spatial Economy," Working papers 2003-07, University of Connecticut, Department of Economics.
    3. Webers, H.M., 1994. "Non-uniformities in spatial location models," Other publications TiSEM 40900087-273a-4119-8f78-3, Tilburg University, School of Economics and Management.
    4. Wen-Chung Guo & Fu-Chuan Lai, 2017. "Prices, Locations and Welfare When an Online Retailer Competes with Heterogeneous Brick-and-Mortar Retailers," Journal of Industrial Economics, Wiley Blackwell, vol. 65(2), pages 439-468, June.
    5. Behringer, Stefan, 2007. "Spacial Predation in the UK Newspaper Industry," MPRA Paper 3242, University Library of Munich, Germany, revised 15 Apr 2007.
    6. Guo, Wen-Chung & Lai, Fu-Chuan & Suen, Wing, 2018. "Downs meets d’Aspremont and company: Convergence versus differentiation in politics and the media," International Journal of Industrial Organization, Elsevier, vol. 60(C), pages 96-125.

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