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Cournot competition in spatial markets: some complementary results on complementarity

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Abstract

We study location equilibria for Cournot oligopolies selling complementary goods. For a single-store triopoly, we prove that the circular market also yields partial diamentrical dispersion besides total agglomeration. We turn to multi-plant duopolies and in contrast to other contributions on the topic, we allow firms to sell more than one product. We confirm the intuition that total agglomeration of outlets is always an equilibrium, whatever the market shape. However, the circular case also exhibits intra-firm agglomeration and inter-firm equal distance dispersion. This is a pattern never before obtained, entirely due to the assumption of intra-firm product complementarity

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  • Andrea Cosnita, 2005. "Cournot competition in spatial markets: some complementary results on complementarity," Cahiers de la Maison des Sciences Economiques v05061, Université Panthéon-Sorbonne (Paris 1), revised Apr 2006.
    • Handle: RePEc:mse:wpsorb:v05061
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    More about this item

    Keywords

    Complementary products; multi-store competition; spatial Cournot model;
    All these keywords.

    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
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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