IDEAS home Printed from https://ideas.repec.org/p/unl/unlfep/wp593.html
   My bibliography  Save this paper

Three Equivalent Salop Models and their Normative Representative Consumer

Author

Listed:
  • Steffen Hoernig

Abstract

We show that three location models on the Salop circle, involving linear or quadratic transport cost, and asymmetric locations or fixed benefits, are equivalent: they lead to the same demand functions and consumer surplus. The only exception is the case of asymmetric lo- cations with an even number of firms, which has one less degree of freedom. These models are also fully equivalent to a normative rep- resentative consumer whose indirect utility is given by the standard Salop consumer surplus. This result provides a further unification of location and representative consumer models. JEL codes: D11, D43

Suggested Citation

  • Steffen Hoernig, 2015. "Three Equivalent Salop Models and their Normative Representative Consumer," FEUNL Working Paper Series wp593, Universidade Nova de Lisboa, Faculdade de Economia.
  • Handle: RePEc:unl:unlfep:wp593
    as

    Download full text from publisher

    File URL: http://fesrvsd.fe.unl.pt/WPFEUNL/WP2015/Wp593.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Duarte Brito & Pedro Pereira, 2010. "Access to Bottleneck Inputs under Oligopoly: A Prisoners’ Dilemma?," Southern Economic Journal, Southern Economic Association, vol. 76(3), pages 660-677, January.
    2. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    3. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Salop model; representative consumer;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unl:unlfep:wp593. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sean Story). General contact details of provider: http://edirc.repec.org/data/feunlpt.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.