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Retailer Locations, Local Supply And Price Policies

Author

Listed:
  • Carlos Gutiérrez-Hita

    (Universidad de Alicante)

  • Martin Peitz

    (Universidad de Alicante)

Abstract

Two retailers operate in a monopsonistic, oligopolistic environment. They have to buy from spatially dispersed suppliers and use uniform pricing downstream. We characterize prices and location in the two-stage location-then-price game under two different pricing policies in the upstream market: uniform pricing and spatial price discrimination. We analyze how local supply conditions affect equilibrium locations and profits. We show that if retailers can choose a price policy initially they commit to uniform pricing in the upstream market.

Suggested Citation

  • Carlos Gutiérrez-Hita & Martin Peitz, 2001. "Retailer Locations, Local Supply And Price Policies," Working Papers. Serie AD 2001-26, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2001-26
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2001-26.pdf
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    References listed on IDEAS

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    6. Aguirre, Inaki & Espinosa, Maria Paz & Macho-Stadler, Ines, 1998. "Strategic entry deterrence through spatial price discrimination," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 297-314, May.
    7. Thisse, Jacques-Francois & Vives, Xavier, 1988. "On the Strategic Choice of Spatial Price Policy," American Economic Review, American Economic Association, vol. 78(1), pages 122-137, March.
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    Cited by:

    1. Nikolaos Georgantzis & Carlos Gutiérrez-Hita, 2008. "Service provision on a network with endogenous consumption capacity," Working Papers. Serie AD 2008-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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