IDEAS home Printed from https://ideas.repec.org/a/kap/netspa/v25y2025i2d10.1007_s11067-024-09629-z.html
   My bibliography  Save this article

Cooperative Location for Competing Firms under Delivered Pricing and Demand Linear in Price

Author

Listed:
  • Blas Pelegrín

    (Universidad de Murcia
    University of Murcia)

  • Pascual Fernández

    (University of Murcia)

  • María Dolores García

    (San Antonio Catholic University of Murcia)

Abstract

The location-price decision problem for competing firms can be reduced to a location game if firms compete on delivered pricing. This game has often been studied for non-cooperative firms where the Nash equilibrium is used as solution concept. However, it may occurs that there exist alternative locations for which all firms get higher payoffs than those prescribed by the equilibrium. This fact has been shown by the authors for joint profit maximization locations when demand is fixed and firms set equilibrium prices. In this paper, we study the location game considering that demand is linear in price and firms cooperate by setting the monopoly price at each market instead of the equilibrium price. Two Mixed Integer Linear Programming location models are developed to maximize the joint profit for different and equal production costs, respectively. An empirical investigation is performed to compare the joint profit of the firms, which is obtained by the solutions of the proposed location models, with the one obtained by the Nash equilibrium solution that is obtained if the firms do not cooperate.

Suggested Citation

  • Blas Pelegrín & Pascual Fernández & María Dolores García, 2025. "Cooperative Location for Competing Firms under Delivered Pricing and Demand Linear in Price," Networks and Spatial Economics, Springer, vol. 25(2), pages 367-385, June.
    • Handle: RePEc:kap:netspa:v:25:y:2025:i:2:d:10.1007_s11067-024-09629-z
    DOI: 10.1007/s11067-024-09629-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11067-024-09629-z
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11067-024-09629-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:netspa:v:25:y:2025:i:2:d:10.1007_s11067-024-09629-z. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.