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Myopic Spatial Competition: Boundary Effects And Network Solutions

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  • Gordon F. Mulligan

Abstract

ABSTRACT Recent findings suggest that spatial competition studies should focus more on markets having numerous firms and realistic topologies. Eventually clarification is needed of the existence conditions and properties of multi‐firm equilibria in network markets. This paper uses a traditional conjectures approach to examine long‐run equilibria in a variety of one‐dimensional markets. In all cases consumer demand is perfectly inelastic, price conjectures are exogenous, and (interior) firms show maximum locational differentiation. The attitude of firms is always myopic and never strategic, however. In a linear market the analysis discloses that firm price depends upon price in the counterpart circular market, a boundary effect, the spatial aggression of exterior firms, and the location of the firm. In a network market the analysis discloses that multiple equilibria occur and that the existence conditions for these equilibria depend upon both the geometric properties of the network and the price conjectures of the firms.

Suggested Citation

  • Gordon F. Mulligan, 1996. "Myopic Spatial Competition: Boundary Effects And Network Solutions," Papers in Regional Science, Wiley Blackwell, vol. 75(2), pages 155-176, April.
    • Handle: RePEc:bla:presci:v:75:y:1996:i:2:p:155-176
    DOI: 10.1111/j.1435-5597.1996.tb00659.x
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    Cited by:

    1. Aizawa, Hiroki & Kono, Tatsuhito, 2022. "Two-dimensional Geographical Position as a Factor in Determining the Growth and Decline of Retail Agglomeration," MPRA Paper 112274, University Library of Munich, Germany.
    2. Ralph Braid, 2013. "The locations of firms on intersecting roadways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 791-808, June.
    3. Anping Chen & Marlon Boarnet & Mark Partridge & Gordon F. Mulligan, 2014. "Handbook of Regional Science (3 volumes) , edited by Manfred M. Fischer and Peter Nijkamp . Springer Reference Series. Heidelberg : Springer . 1732 + xxxvii. ISBN-978-3-642-23429-3; ISBN 978-3-642-234," Journal of Regional Science, Wiley Blackwell, vol. 54(4), pages 711-716, September.
    4. Xiaoming Ning & Robert Haining, 2003. "Spatial Pricing in Interdependent Markets: A Case Study of Petrol Retailing in Sheffield," Environment and Planning A, , vol. 35(12), pages 2131-2159, December.

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