Optimal Transportation Policy with Strategic Locational Choice
This paper presents a model of strategic locational choice by duopolistic firms in an urban area where consumer locations are endogenous and where a public facility is exogenously fixed. A welfare analysis taking their strategic behaviour into account is conducted. It is shown that the firms' equilibrium locations often differ from the optimal locations which, in contrast to standard location theory, are not at the quartiles of the urban area. Corrective transportation taxes or subsidies can be used to support an optimal locational structure. Changes in transportation costs require unit-for-unit offsetting changes in transportation taxes or subsidies.
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|Date of creation:||Apr 1994|
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- Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
- Masahisa Fujita & Jacques-François Thisse, 1986. "Spatial Competition with a Land Market: Hotelling and Von Thunen Unified," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 819-841.
- Fujita,Masahisa, 1989.
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Cambridge University Press, number 9780521346627.
- THISSE, Jacques & WILDASIN, David, 1990.
"Public facility location and urban spatial structure. Equilibrium and welfare analysis,"
CORE Discussion Papers
1990025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Thisse, Jacques-Francois & Wildasin, David E., 1992. "Public facility location and urban spatial structure : Equilibrium and welfare analysis," Journal of Public Economics, Elsevier, vol. 48(1), pages 83-118, June.
- FUJITA, Masahisa & THISSE, Jacques-François, .
"Spatial duopoly and residential structure,"
CORE Discussion Papers RP
942, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Thisse, Jacques-Francois, 1993. "Oligopoly and the polarization of space," European Economic Review, Elsevier, vol. 37(2-3), pages 299-307, April.
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