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Delivered Pricing, Positive Externalities and Firm Dispersion

Author

Listed:
  • Barnali Gupta

    (Miami University)

Abstract

This note examines firm locations in a delivered pricing model with positive production externalities. We find that, quite counter intuitively, firms will disperse rather than move closer, when production externalities are positive and reciprocal. Furthermore, we see a divergence between the private and social optimal locations, which is in contrast to the coincidence of these locations in the standard delivered pricing model.

Suggested Citation

  • Barnali Gupta, 2008. "Delivered Pricing, Positive Externalities and Firm Dispersion," Economics Bulletin, AccessEcon, vol. 12(32), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-08l10013
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    References listed on IDEAS

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    More about this item

    Keywords

    Location dispersion;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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