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Optimal Zoning in Spatial Differentiation

Listed author(s):
  • Hamid Hamoudi
  • Isabel Rodríguez
  • Marcos Sanz Martín-Bustamante

    ()

Registered author(s):

    This study analyzes optimal zoning policy in a duopolistic spatial competition framework for both circular and linear spaces. A regulator is introduced in the third stage of the price-location game through a welfare function to model zoning preferences from firms and consumers. An equilibrium outcome is then found for both spatial configurations. When the regulator is inclined to favor consumers (consumer-oriented) both firms are restricted to locate at one point to serve the whole market. Nevertheless, when the preferences of the regulator are biased towards firms (firm-oriented) the zoning area is maximized, with both firms being located at the market boundaries. The equilibrium outcome confirms location patterns found in real life situations under a non-neutral regulator.

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    File URL: http://estudiosdeeconomia.uchile.cl/index.php/EDE/article/viewFile/45213/47923
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    Article provided by University of Chile, Department of Economics in its journal Estudios de Economia.

    Volume (Year): 44 (2017)
    Issue (Month): 1 Year 2017 (June)
    Pages: 33-51

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    Handle: RePEc:udc:esteco:v:44:y:2017:i:1:p:33-51
    Contact details of provider: Web page: http://www.econ.uchile.cl/

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    18. Hamid Hamoudi & Isabel Mª Rodríguez Iglesias & Marcos Sanz Martín-Bustamante, 2015. "The equivalence of convex and concave transport cost in a circular spatial model with and without zoning," Estudios de Economia, University of Chile, Department of Economics, vol. 42(1 Year 20), pages 5-20, June.
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