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From Local to Global Competition

Author

Listed:
  • Anderson, Simon P
  • de Palma, André

Abstract

We introduce a framework that has known models of oligopolistic competition with differentiated products (the circle and the constant elasticity of substitution (CES)) as limit cases. This integrative approach incorporates both localized and global competition, as well as price-sensitive individual demands. It is used to consider the qualitative impact of major changes over the last two centuries: reduction in transport costs, increased taste for variety, population growth, and use of technologies with greater returns to scale. We work out the properties of an extended Chamberlinian model that should be useful both in industrial organization and urban economics.

Suggested Citation

  • Anderson, Simon P & de Palma, André, 1996. "From Local to Global Competition," CEPR Discussion Papers 1328, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1328
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    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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