IDEAS home Printed from
   My bibliography  Save this article

Monopolistic Competition on the Pyramid


  • von Ungern-Sternberg, Thomas


The purpose of this paper is to develop a model of monopolistic competition that has a simple locational interpretation and which allows for multifirm competition. One of the major weaknesses of the standard "circular road" model is the fact that it allows only localized competition. This creates problems when one wishes to analyze problems of international trade, where one often has to work with firms with different production costs. One of the major advantages of the "pyramid" model presented here is that one can easily compute the firms' equilibrium profits even when their production costs differ. Copyright 1991 by Blackwell Publishing Ltd.

Suggested Citation

  • von Ungern-Sternberg, Thomas, 1991. "Monopolistic Competition on the Pyramid," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 355-368, June.
  • Handle: RePEc:bla:jindec:v:39:y:1991:i:4:p:355-68

    Download full text from publisher

    File URL:
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Porter, Michael E, 1976. "Interbrand Choice, Media Mix and Market Performance," American Economic Review, American Economic Association, vol. 66(2), pages 398-406, May.
    2. Nickell, Stephen J & Metcalf, David, 1978. "Monopolistic Industries and Monopoly Profits or, Are Kellogg's Cornflakes Overpriced?," Economic Journal, Royal Economic Society, vol. 88(350), pages 254-268, June.
    3. Pagoulatos, Emilio & Sorensen, Robert, 1986. "What determines the elasticity of industry demand?," International Journal of Industrial Organization, Elsevier, vol. 4(3), pages 237-250, September.
    4. Joseph E. Stiglitz & G. Frank Mathewson (ed.), 1986. "New Developments in the Analysis of Market Structure," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262690934, January.
    5. Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, vol. 43(171), pages 267-274, August.
    6. Connor, John M & Peterson, Everett B, 1992. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 157-171, June.
    7. A. P. Lerner, 1934. "The Concept of Monopoly and the Measurement of Monopoly Power," Review of Economic Studies, Oxford University Press, vol. 1(3), pages 157-175.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Neumann, Karl-Heinz & Vogelsang, Ingo, 2013. "How to price the unbundled local loop in the transition from copper to fiber access networks?," Telecommunications Policy, Elsevier, vol. 37(10), pages 893-909.
    2. Brito, Duarte, 2003. "Preemptive mergers under spatial competition," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1601-1622, December.
    3. Steffen HOERNIG & Stephan JAY & Werner NEU & Karl-Heinz NEUMANN & Thomas PLÜCKEBAUM & Ingo VOGELSANG, 2012. "Wholesale Pricing, NGA Take-Up and Competition," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(86), pages 153-174, 2nd quart.
    4. Hoernig, Steffen, 2014. "Competition between multiple asymmetric networks: Theory and applications," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 57-69.
    5. Garcia-Gallego, Aurora & Georgantzis, Nikolaos, 2001. "Multiproduct activity in an experimental differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 493-518, March.
    6. Marco Alderighi & Claudio A. Piga, 2008. "The Circular City with Heterogenous Firms," Working Paper series 16_08, Rimini Centre for Economic Analysis.
    7. Braid, Ralph M., 1998. "Spatial price competition when stores are not certain to have what consumers want," Regional Science and Urban Economics, Elsevier, vol. 28(2), pages 143-161, March.
    8. Weeds, Helen, 2012. "Superstars and the long tail: The impact of technology on market structure in media industries," Information Economics and Policy, Elsevier, vol. 24(1), pages 60-68.
    9. Steffen Hoernig & Ingo Vogelsang, 2012. "The Ambivalence of Two-Part Tariffs for Bottleneck Access," FEUNL Working Paper Series wp568, Universidade Nova de Lisboa, Faculdade de Economia.
    10. Adriaan R. Soetevent, 2010. "Price Competition on Graphs," Tinbergen Institute Discussion Papers 10-126/1, Tinbergen Institute, revised 11 Aug 2011.
    11. Hoernig, Steffen & Jay, Stephan & Neumann, Karl-Heinz & Peitz, Martin & Plückebaum, Thomas & Vogelsang, Ingo, 2012. "The impact of different fibre access network technologies on cost, competition and welfare," Telecommunications Policy, Elsevier, vol. 36(2), pages 96-112.
    12. Fraser Summerfield, 2016. "Matching Skill and Tasks: Cyclical Fluctuations in the Overqualification of New Hires," Working Paper series 16-08, Rimini Centre for Economic Analysis.
    13. Lee, Dongyeol, 2015. "Regulating termination charges in asymmetric oligopolies," Information Economics and Policy, Elsevier, vol. 32(C), pages 16-28.
    14. Hoernig, Steffen, 2011. "Asymmetric Broadband Wholesale Regulation," CEPR Discussion Papers 8399, C.E.P.R. Discussion Papers.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:39:y:1991:i:4:p:355-68. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.