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Imperfect competition and congestion in the city

Author

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  • DE PALMA, André
  • PROOST, Stef

Abstract

This paper presents a spatial model to study imperfect competition with congestion. The model is used to examine the price and wage setting of subcenters of a city. Residents live in a city while they shop and work in subcentres. Each subcenter o.ers one di.erentiated product and one di.erentiated workplace. Shopping and commuting from the city to the subcenter requires the use of transport infrastructure that can be congested. We show the existence of a Nash equilibrium in prices and wages and analyse the welfare impacts of congestion charging and infrastructure policies. This paper generalises the literature on imperfect competition with di.erentiated products as well as the literature on congestion pricing with imperfect competition.
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Suggested Citation

  • DE PALMA, André & PROOST, Stef, 2006. "Imperfect competition and congestion in the city," LIDAM Reprints CORE 1879, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1879
    DOI: 10.1016/j.jue.2005.08.002
    Note: In : Journal of Urban Economics, 60, 185-209, 2006
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    Cited by:

    1. Fay Dunkerley & Andre De Palma & Stef Proost, 2009. "Spatial Asymmetric Duopoly With An Application To Brussels' Airports," Journal of Regional Science, Wiley Blackwell, vol. 49(3), pages 529-553, August.
    2. Sun, Weizeng & Guo, Dongmei & Li, Qiang & Fang, Haidong, 2021. "School runs and urban traffic congestion: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    3. de Palma, Andre & Proost, Stef, 2006. "Imperfect competition and congestion in the City," Journal of Urban Economics, Elsevier, vol. 60(2), pages 185-209, September.
    4. Vandyck, Toon & Rutherford, Thomas F., 2018. "Regional labor markets, commuting, and the economic impact of road pricing," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 217-236.

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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