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Cournot and Bertrand in shipping models with circular markets

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  • Toshihiro Matsumura
  • Daisuke Shimizu

Abstract

. We investigate two shipping (delivered pricing) duopoly models with circular markets, Cournot and Bertrand. In the Cournot model, maximal distance between two firms becomes the unique equilibrium outcome if transport cost is increasing with distance, irrespective of whether the transport cost function is convex or concave. This result is robust in the sense that cost heterogeneity between two firms does not change the result. In contrast to the Cournot model, this location pattern can fail to be an equilibrium in the Bertrand model.

Suggested Citation

  • Toshihiro Matsumura & Daisuke Shimizu, 2006. "Cournot and Bertrand in shipping models with circular markets," Papers in Regional Science, Wiley Blackwell, vol. 85(4), pages 585-598, November.
    • Handle: RePEc:bla:presci:v:85:y:2006:i:4:p:585-598
    DOI: 10.1111/j.1435-5957.2006.00098.x
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    Cited by:

    1. Takanori Ago, 2013. "Demand creation and location: a variable consumer-distribution approach in spatial competition," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(3), pages 775-792, December.
    2. Chia-Hung Sun, 2010. "Spatial Cournot competition in a circular city with directional delivery constraints," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(2), pages 273-289, October.
    3. Colombo, Stefano, 2011. "On the rationale of spatial discrimination with quantity-setting firms," Research in Economics, Elsevier, vol. 65(3), pages 254-258, September.
    4. Kirsten Davis & Mark Frascatore, 2014. "A Note On Equilibria In A Circular Location Model With A Single-Peaked Distribution Of Consumers," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 16(03), pages 1-9.
    5. Chia-Hung Sun & Fu-Chuan Lai, 2014. "Spatial price discrimination in a symmetric barbell model: Bertrand vs. Cournot," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 141-158, March.
    6. Stefano Colombo, 2016. "Location choices with a non-linear demand function," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 215-226, March.
    7. Chia-Hung Sun & Jyh-Fa Tsai & Fu-Chuan Lai, 2017. "Spatial Cournot competition in a circular city with more than two dispatches," The Japanese Economic Review, Japanese Economic Association, vol. 68(4), pages 413-442, December.
    8. Colombo, Stefano, 2012. "An indifference result concerning collusion in spatial frameworks," Research in Economics, Elsevier, vol. 66(1), pages 18-21.
    9. Stefano Colombo, 2012. "Collusion in two models of spatial competition with quantity-setting firms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 45-69, February.
    10. Wen-Chung Guo & Fu-Chuan Lai, 2020. "Spatial Cournot competition in two intersecting circular markets," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 37-56, February.
    11. Panos FOUSEKIS & Dimitrios PANAGIOTOU, 2013. "Price and location equilibria in a circular market: a pure vs a mixed duopsony with a co-operative," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(8), pages 341-347.
    12. Toshihiro Matsumura & Noriaki Matsushima, 2012. "Spatial Cournot competition and transportation costs in a circular city," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 33-44, February.
    13. Chia-Hung Sun, 2014. "Spatial Cournot Competition in a Linear City with Directional Delivery Constraints," The Japanese Economic Review, Japanese Economic Association, vol. 65(3), pages 344-374, September.
    14. Stefano Colombo, 2010. "Tax effects on equilibrium locations," Journal of Economics, Springer, vol. 101(3), pages 267-275, November.

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