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Spatial Cournot competition in a linear–circular market

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  • Wen-Chung Guo

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  • Fu-Chuan Lai

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Abstract

This paper explores a linear and circular model with spatial Cournot competition. It is shown that agglomeration of firms at the center of the main street is the equilibrium when the demand density on the main street (linear market) is high, and there exists a unique separated location equilibrium when the density is moderate. Moreover, the socially desirable interior locations are more dispersed than the equilibrium ones. Finally, extensions on tax policies, nonlinear demand, non-uniform distribution, and others are also discussed. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Wen-Chung Guo & Fu-Chuan Lai, 2015. "Spatial Cournot competition in a linear–circular market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 819-834, May.
  • Handle: RePEc:spr:anresc:v:54:y:2015:i:3:p:819-834
    DOI: 10.1007/s00168-015-0687-8
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    References listed on IDEAS

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    1. Lambertini, Luca, 1997. "Optimal Fiscal Regime in a Spatial Duopoly," Journal of Urban Economics, Elsevier, vol. 41(3), pages 407-420, May.
    2. Matsushima, Noriaki, 2001. "Cournot competition and spatial agglomeration revisited," Economics Letters, Elsevier, vol. 73(2), pages 175-177, November.
    3. Gupta, Barnali & Lai, Fu-Chuan & Pal, Debashis & Sarkar, Jyotirmoy & Yu, Chia-Ming, 2004. "Where to locate in a circular city?," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 759-782, June.
    4. Stefano Colombo, 2016. "Location choices with a non-linear demand function," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 215-226, March.
    5. Corrado Benassi, 2014. "Dispersion equilibria in spatial Cournot competition," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 611-625, March.
    6. Pal, Debashis, 1998. "Does Cournot competition yield spatial agglomeration?," Economics Letters, Elsevier, vol. 60(1), pages 49-53, July.
    7. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February.
    8. Stefano Colombo, 2016. "A Model of Three Cities," International Regional Science Review, , vol. 39(4), pages 386-416, October.
    9. Takeshi Ebina & Toshihiro Matsumura & Daisuke Shimizu, 2011. "Spatial Cournot equilibria in a quasi‐linear city," Papers in Regional Science, Wiley Blackwell, vol. 90(3), pages 613-628, August.
    10. Shimizu, Daisuke, 2002. "Product differentiation in spatial Cournot markets," Economics Letters, Elsevier, vol. 76(3), pages 317-322, August.
    11. Anderson, Simon P & Neven, Damien J, 1991. "Cournot Competition Yields Spatial Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 793-808, November.
    12. Noriaki Matsushima & Toshihiro Matsumura, 2003. "Mixed oligopoly and spatial agglomeration," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 62-87, February.
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    Keywords

    D43; L13;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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