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Cournot competition in spatial markets: Some further results

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  • Chia-Ming Yu
  • Fu-Chuan Lai

Abstract

In contrast to most of the literature on a circular market in which firms choose to disperse equally from each other in equilibrium, this research note shows that the equal-distance dispersion in a circular market results from the substitutability of products produced by two single-plant duopoly firms. Meanwhile, agglomeration at one point results from complementarity. In the multi-plant duopoly case, we find - in contrast to Chamorro-Rivas (2000) - that when firms sell complements, the equilibrium locations tend to exhibit both inter-firm agglomeration and intra-firm dispersion. In other words, the location layout in equilibrium exhibits spatial agglomeration (by pairs) finitely at many points. Copyright Springer-Verlag Berlin/Heidelberg 2003

Suggested Citation

  • Chia-Ming Yu & Fu-Chuan Lai, 2003. "Cournot competition in spatial markets: Some further results," Economics of Governance, Springer, vol. 82(4), pages 569-580, November.
    • Handle: RePEc:spr:ecogov:v:82:y:2003:i:4:p:569-580
    DOI: 10.1007/s10110-003-0154-2
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    Cited by:

    1. Colombo, Stefano, 2011. "On the rationale of spatial discrimination with quantity-setting firms," Research in Economics, Elsevier, vol. 65(3), pages 254-258, September.
    2. Andreea Cosnita-Langlais, 2011. "Cournot competition in spatial markets: a complementary result on complementarity," Economics Bulletin, AccessEcon, vol. 31(3), pages 2454-2467.
    3. Chia-Hung Sun & Jyh-Fa Tsai & Fu-Chuan Lai, 2017. "Spatial Cournot competition in a circular city with more than two dispatches," The Japanese Economic Review, Japanese Economic Association, vol. 68(4), pages 413-442, December.
    4. Li, Changying, 2006. "Location choice in a mixed oligopoly," Economic Modelling, Elsevier, vol. 23(1), pages 131-141, January.
    5. Takeshi Ebina & Daisuke Shimizu, 2012. "Endogenous product differentiation and product R&D in spatial Cournot competition," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(1), pages 117-133, August.
    6. Ching‐Chih Tseng & Wen‐Jung Liang & Kuang‐Cheng Andy Wang, 2010. "Spatial agglomeration with vertical differentiation," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 841-858, November.
    7. Karamychev, Vladimir & van Reeven, Peran, 2009. "Retail sprawl and multi-store firms: An analysis of location choice by retail chains," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 277-286, May.
    8. Wen-Jung Liang & Yen-Ju Lin & Hong Hwang, 2012. "Heterogeneous duopoly, spatially discriminatory pricing, and optimal location," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 845-860, December.
    9. 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.
    10. Chia-Hung Sun, 2014. "Spatial Cournot Competition in a Linear City with Directional Delivery Constraints," The Japanese Economic Review, Japanese Economic Association, vol. 65(3), pages 344-374, September.
    11. Joaquín Andaluz, 2009. "Vertical product differentiation with subcontracting," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 785-798, November.
    12. Chia-Hung Sun & Jyh-Fa Tsai & Fu-Chuan Lai, 2017. "Spatial Cournot Competition in a Circular City with More than Two Dispatches," The Japanese Economic Review, Springer, vol. 68(4), pages 413-442, December.
    13. Chia-Hung Sun, 2010. "Spatial Cournot competition in a circular city with directional delivery constraints," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(2), pages 273-289, October.
    14. 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.
    15. Liang, Wen-Jung & Hwang, Hong & Mai, Chao-Cheng, 2006. "Spatial discrimination: Bertrand vs. Cournot with asymmetric demands," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 790-802, November.
    16. Wen-Chung Guo & Fu-Chuan Lai, 2020. "Spatial Cournot competition in two intersecting circular markets," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 37-56, February.
    17. Toshihiro Matsumura & Noriaki Matsushima, 2012. "Spatial Cournot competition and transportation costs in a circular city," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 33-44, February.
    18. Santiago Carbó Valverde & Miguel Fortes Escalona, 2010. "Spatial Cournot equilibrium: do branches matter?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 377-407, April.
    19. Stefano Colombo, 2016. "Location choices with a non-linear demand function," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 215-226, March.
    20. Takeshi Ebina & Toshihiro Matsumura & Daisuke Shimizu, 2009. "Mixed oligopoly and spatial agglomeration in quasi-linear city," Economics Bulletin, AccessEcon, vol. 29(4), pages 2722-2729.
    21. Stefano Colombo, 2012. "Collusion in two models of spatial competition with quantity-setting firms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 45-69, February.

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