Do Firms Compete When Demand is Low? A Model of Spatial Differentiation
In a spatial competition model, changes in firms’ competitive behaviour may occur when the hypothesis that individual gross surplus is positive in equilibrium is relaxed. We prove that there exists a region of the relevant parameter where firms’ behaviour mimics collusion, while in another range they find it optimal to isolate from each other and behave monopolistically.
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- Beath,John & Katsoulacos,Yannis, 1991. "The Economic Theory of Product Differentiation," Cambridge Books, Cambridge University Press, number 9780521335263, November.Full references (including those not matched with items on IDEAS)
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