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An Unequal Spatial Structure of Location and Price with Consumer Density

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  • TOSHIHARU ISHIKAWA
  • MASAO TODA

Abstract

This paper incorporates the interdependent relationship of firms and the increasing consumer density into a framework of spatial equilibrium analysis, and studies the location of firms and the price system on a plane market. As consumer density increases, symmetric equilibrium is established initially for the first‐ and the second‐round entry of firms, but this equilibrium becomes unequal later for the third and the fourth rounds. This fact means that in spatial equilibrium, even if all firms sell identical goods on a plane market, mill prices and market area sizes will differ.

Suggested Citation

  • Toshiharu Ishikawa & Masao Toda, 1995. "An Unequal Spatial Structure of Location and Price with Consumer Density," The Economic Record, The Economic Society of Australia, vol. 71(2), pages 167-178, June.
    • Handle: RePEc:bla:ecorec:v:71:y:1995:i:2:p:167-178
    DOI: 10.1111/j.1475-4932.1995.tb01883.x
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    References listed on IDEAS

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    1. Parr, John B, 1993. "Competition, Supply Areas and Industrial Location: An Equilibrium Perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 27(3), pages 191-210, September.
    2. Holahan, William L & Schuler, Richard E, 1981. "The Welfare Effects of Market Shapes in the Loschian Location Model: Squares vs. Hexagons [The Non-Uniqueness of Equilibrium in the Loschian Location Model]," American Economic Review, American Economic Association, vol. 71(4), pages 738-746, September.
    3. MacLeod, W B & Norman, G & Thisse, J-F, 1987. "Competition, Tacit Collusion and Free Entry," Economic Journal, Royal Economic Society, vol. 97(385), pages 189-198, March.
    4. Capozza, Dennis R & Van Order, Robert, 1978. "A Generalized Model of Spatial Competition," American Economic Review, American Economic Association, vol. 68(5), pages 896-908, December.
    5. A. P. Lerner & H. W. Singer, 1937. "Some Notes on Duopoly and Spatial Competition," Journal of Political Economy, University of Chicago Press, vol. 45(2), pages 145-145.
    6. Ishikawa, Toshiharu & Toda, Masao, 1990. "Spatial Configurations, Competition and Welfare," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 24(1), pages 1-12.
    7. B. Curtis Eaton & Myrna Holtz Wooders, 1985. "Sophisticated Entry in a Model of Spatial Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 282-297, Summer.
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    Cited by:

    1. Toshiharu Ishikawa & Masao Toda, 2000. "Some Economic Extensions of Central-place Theory Involving Profit Maximisation," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 481-495, March.
    2. Toshiharu Ishikawa & Masao Toda, 1998. "An Application of the Frontier Price Concept in Spatial Equilibrium Analysis," Urban Studies, Urban Studies Journal Limited, vol. 35(8), pages 1345-1358, July.

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