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Spatial Cournot Competition and Heterogeneous Production Costs Across Locations

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  • Mayer, T.

Abstract

The model developed in this paper extends the strategic location framework under Cournot competition in order to allow for different production costs across locations.

Suggested Citation

  • Mayer, T., 1999. "Spatial Cournot Competition and Heterogeneous Production Costs Across Locations," Papiers d'Economie Mathématique et Applications 1999.89, Université Panthéon-Sorbonne (Paris 1).
  • Handle: RePEc:fth:pariem:1999.89
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    References listed on IDEAS

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    1. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
    2. Henderson, J Vernon & Kuncoro, Ari, 1996. "Industrial Centralization in Indonesia," World Bank Economic Review, World Bank Group, vol. 10(3), pages 513-540, September.
    3. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
    4. Anderson, Simon P. & Thisse, Jacques-Francois, 1988. "Price discrimination in spatial competitive markets," European Economic Review, Elsevier, vol. 32(2-3), pages 578-590, March.
    5. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May.
    6. Rauch, James E, 1991. "Comparative Advantage, Geographic Advantage and the Volume of Trade," Economic Journal, Royal Economic Society, vol. 101(408), pages 1230-1244, September.
    7. Hamilton, Jonathan H. & Thisse, Jacques-Francois & Weskamp, Anita, 1989. "Spatial discrimination : Bertrand vs. Cournot in a model of location choice," Regional Science and Urban Economics, Elsevier, vol. 19(1), pages 87-102, February.
    8. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    9. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, August.
    10. Horstmann, Ignatius J. & Markusen, James R., 1992. "Endogenous market structures in international trade (natura facit saltum)," Journal of International Economics, Elsevier, vol. 32(1-2), pages 109-129, February.
    11. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    12. Pal, Debashis, 1998. "Does Cournot competition yield spatial agglomeration?," Economics Letters, Elsevier, vol. 60(1), pages 49-53, July.
    13. Smith, Alasdair, 1987. "Strategic investment, multinational corporations and trade policy," European Economic Review, Elsevier, vol. 31(1-2), pages 89-96.
    14. de Palma, A, et al, 1985. "The Principle of Minimum Differentiation Holds under Sufficient Heterogeneity," Econometrica, Econometric Society, vol. 53(4), pages 767-781, July.
    15. repec:ulb:ulbeco:2013/1759 is not listed on IDEAS
    16. Anderson, Simon P & Neven, Damien J, 1991. "Cournot Competition Yields Spatial Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 793-808, November.
    17. repec:adr:anecst:y:1997:i:45:p:06 is not listed on IDEAS
    18. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    19. Gupta, Barnali & Pal, Debashis & Sarkar, Jyotirmoy, 1997. "Spatial Cournot competition and agglomeration in a model of location choice," Regional Science and Urban Economics, Elsevier, vol. 27(3), pages 261-282, June.
    20. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
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    Citations

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    Cited by:

    1. Ricardo Biscaia & Isabel Mota, 2013. "Models of spatial competition: A critical review," Papers in Regional Science, Wiley Blackwell, vol. 92(4), pages 851-871, November.
    2. Hinloopen, Jeroen & Martin, Stephen, 2017. "Costly location in Hotelling duopoly," Research in Economics, Elsevier, vol. 71(1), pages 118-128.
    3. Colombo, Stefano, 2011. "On the rationale of spatial discrimination with quantity-setting firms," Research in Economics, Elsevier, vol. 65(3), pages 254-258, September.
    4. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February.
    5. repec:ebl:ecbull:v:12:y:2008:i:22:p:1-5 is not listed on IDEAS
    6. Matsumura, Toshihiro & Shimizu, Daisuke, 2005. "Spatial Cournot competition and economic welfare: a note," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 658-670, November.
    7. Brekke, Kurt R. & Straume, Odd Rune, 2004. "Bilateral monopolies and location choice," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 275-288, May.
    8. Torbenko, A., 2015. "Linear City Models: Overview and Typology," Journal of the New Economic Association, New Economic Association, vol. 25(1), pages 12-38.
    9. Stefano Colombo, 2016. "Location choices with a non-linear demand function," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 215-226, March.
    10. repec:taf:apeclt:v:23:y:2016:i:12:p:888-896 is not listed on IDEAS
    11. Guerrazzi, Marco, 2012. "Asymptotic relations in Cournot's game," MPRA Paper 42761, University Library of Munich, Germany.
    12. Stefano Colombo, 2015. "A comment on the locations of firms in Cournot spatial discrimination models," Letters in Spatial and Resource Sciences, Springer, vol. 8(2), pages 119-124, July.
    13. Liang, Wen-Jung & Hwang, Hong & Mai, Chao-Cheng, 2006. "Spatial discrimination: Bertrand vs. Cournot with asymmetric demands," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 790-802, November.
    14. Gupta, Barnali & Lai, Fu-Chuan & Pal, Debashis & Sarkar, Jyotirmoy & Yu, Chia-Ming, 2004. "Where to locate in a circular city?," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 759-782, June.
    15. Qiang Wang & Qi Chen, 2008. "Cournot competition and location choice with wage bargaining," Economics Bulletin, AccessEcon, vol. 12(22), pages 1-5.
    16. José Pedro Pontes, 2006. "Agglomeration and comparative advantage in vertically-related firms," Working Papers Department of Economics 2006/17, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    17. Joana Pais & José Pedro Pontes, 2008. "Fragmentation And Clustering In Vertically Linked Industries," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 991-1006.
    18. Sylvain Barde, 2007. "Modelling the Folk Theorem: A Spatial Cournot Model with Explicit Increasing Returns to Scale," Studies in Economics 0701, School of Economics, University of Kent.
    19. André Rocha & José Pedro Pontes, 2005. "Spatial Cournot Oligopoly with Vertical Linkages," Working Papers Department of Economics 2005/11, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.

    More about this item

    Keywords

    COMPETITION ; PRODUCTION ; INDUSTRY LOCATION ; ECONOMIC MODELS;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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