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Mixed spatial duopoly, consumers’ distribution and efficiency

Author

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  • Benassi, Corrado
  • Chirco, Alessandra
  • Colombo, Caterina

Abstract

We solve a mixed spatial duopoly with a generic log-concave consumers’ distribution. We show that the sub-game perfect equilibrium in prices and locations exists and is generally inefficient, so that the efficiency in the standard uniform distribution case stands out as an exception. Notable examples show that the inefficiency may increase as the distribution becomes more concentrated.

Suggested Citation

  • Benassi, Corrado & Chirco, Alessandra & Colombo, Caterina, 2017. "Mixed spatial duopoly, consumers’ distribution and efficiency," Economics Letters, Elsevier, vol. 156(C), pages 74-77.
    • Handle: RePEc:eee:ecolet:v:156:y:2017:i:c:p:74-77
    DOI: 10.1016/j.econlet.2017.04.017
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    References listed on IDEAS

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    1. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991. "Mixed oligopoly with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 43-53, March.
    2. Toshihiro Matsumura & Noriaki Matsushima, 2003. "Mixed Duopoly with Product Differentiation: Sequential Choice of Location," Australian Economic Papers, Wiley Blackwell, vol. 42(1), pages 18-34, March.
    3. Yuanzhu Lu & Sougata Poddar, 2007. "Firm Ownership, Product Differentiation And Welfare," Manchester School, University of Manchester, vol. 75(2), pages 210-217, March.
    4. Toshihiro Matsumura & Noriaki Matsushima, 2004. "Endogenous Cost Differentials between Public and Private Enterprises: A Mixed Duopoly Approach," Economica, London School of Economics and Political Science, vol. 71(284), pages 671-688, November.
    5. Minoru Kitahara & Toshihiro Matsumura, 2013. "Mixed Duopoly, Product Differentiation And Competition," Manchester School, University of Manchester, vol. 81(5), pages 730-744, September.
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    Cited by:

    1. Jorge Fernández-Ruiz, 2020. "Mixed duopoly in a Hotelling framework with cubic transportation costs," Letters in Spatial and Resource Sciences, Springer, vol. 13(2), pages 133-149, August.

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    More about this item

    Keywords

    Mixed duopoly; Spatial competition; Consumers’ distribution; Efficiency of equilibrium;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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