Price-Dependent Demand in Spatial Models
This paper introduces price-dependent individual demand into the circular city model of product differentiation. We show that for any finite number of firms, an unique symmetric price equilibrium exists provided that demand functions are not “too” convex. As in the case of unit demand, the number of firms under free entry decreases in the fixed cost of entry while increases in the transportation cost of consumers. However, this number is no longer always in excess of the socially optimal level. Insufficient entry occurs when the fixed and transportation costs are high.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 12 (2012)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/bejeap|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simon P. Anderson & Andre de Palma, 1998.
"From Local to Global Competition,"
Virginia Economics Online Papers
344, University of Virginia, Department of Economics.
- Anderson, Simon P & de Palma, André, 1996. "From Local to Global Competition," CEPR Discussion Papers 1328, C.E.P.R. Discussion Papers.
- S. P. Anderson & A. de Palma, 1997. "From local to global competition," THEMA Working Papers 97-10, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Gu, Yiquan & Wenzel, Tobias, 2007.
"A Note on the Excess Entry Theorem in Spatial Models with Elastic Demand,"
Ruhr Economic Papers
33, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
- Gu, Yiquan & Wenzel, Tobias, 2009. "A note on the excess entry theorem in spatial models with elastic demand," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 567-571, September.
- Norman, G. & Thisse, J.-F., "undated".
"Product variety and welfare under tough and soft pricing regimes,"
CORE Discussion Papers RP
1201, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Norman, George & Thisse, Jacques-Francois, 1996. "Product Variety and Welfare under Tough and Soft Pricing Regimes," Economic Journal, Royal Economic Society, vol. 106(434), pages 76-91, January.
- Maarten C.W. Janssen & Vladimir A. Karamychev & Peran van Reeven, 2003.
"Multi-Store Competition: Market Segmentation or Interlacing?,"
Tinbergen Institute Discussion Papers
03-033/1, Tinbergen Institute.
- Janssen, Maarten C.W. & Karamychev, Vladimir A. & van Reeven, Peran, 2005. "Multi-store competition: Market segmentation or interlacing?," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 700-714, November.
- Andrew Caplin & Barry Nalebuff, 1990.
"Aggregation and Imperfect Competition: On the Existence of Equilibrium,"
Cowles Foundation Discussion Papers
937, Cowles Foundation for Research in Economics, Yale University.
- Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January.
- Antoni Calvó-Armengol & Yves Zenou, 2002.
"The Importance of the Distribution of Consumers in Horizontal Product Differentiation,"
Journal of Regional Science,
Wiley Blackwell, vol. 42(4), pages 793-803.
- Calvó-Armengol, Antoni & Zenou, Yves, 2001. "The Importance of the Distribution of Consumers in Horizontal Product Differentiation," CEPR Discussion Papers 3031, C.E.P.R. Discussion Papers.
- Shilony, Yuval, 1981. "Hotelling's competition with general customer distributions," Economics Letters, Elsevier, vol. 8(1), pages 39-45.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979.
"On Hotelling's "Stability in Competition","
Econometric Society, vol. 47(5), pages 1145-1150, September.
- Toshihiro Matsumura, 2000. "Entry regulation and social welfare with an integer problem," Journal of Economics, Springer, vol. 71(1), pages 47-58, February.
- Madden Paul & Pezzino Mario, 2011.
"Oligopoly on a Salop Circle with Centre,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 11(1), pages 1-30, January.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716.
- Suleymanova, Irina & Wey, Christian, 2011.
"Bertrand competition in markets with network effects and switching costs,"
DICE Discussion Papers
30, Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf.
- Suleymanova Irina & Wey Christian, 2011. "Bertrand Competition in Markets with Network Effects and Switching Costs," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-58, September.
- Irina Suleymanova & Christian Wey, 2008. "Bertrand Competition in Markets with Network Effects and Switching Costs," Discussion Papers of DIW Berlin 796, DIW Berlin, German Institute for Economic Research.
- Matsumura, Toshihiro & Okamura, Makoto, 2006. "A note on the excess entry theorem in spatial markets," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1071-1076, September.
- Matsumura Toshihiro & Matsushima Noriaki, 2010. "When Small Firms Fight Back Against Large Firms in R&D Activities," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-42, September.
- Neven, Damien J., 1986.
"On Hotelling's competition with non-uniform customer distributions,"
Elsevier, vol. 21(2), pages 121-126.
- Neven, D., 1985. "On hotelling’s competition with non uniform customer distributions," CORE Discussion Papers 1985044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Rath, Kali P. & Zhao, Gongyun, 2001. "Two stage equilibrium and product choice with elastic demand," International Journal of Industrial Organization, Elsevier, vol. 19(9), pages 1441-1455, November.
When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:12:y:2012:i:1:n:6. 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: (Peter Golla)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.