Location as an instrument for social welfare improvement in a spatial model of Cournot competition
Two-stage models are main frameworks in the analysis of oligopolistic competition. Literature has discussed some properties of such models when Cournot competition occurs in the second stage and assuming a non-spatial context. It finds that private and social optima are asymmetric. Using a spatial behavior with multiple marketplaces, the outcome is different. A social planner can use the location variable as an instrument for reallocating production from the equilibrium spatial pattern to the optimal outcome while maintaining the symmetry of the model.
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- Bergstrom, Theodore C. & Varian, Hal R., 1985. "Two remarks on Cournot equilibria," Economics Letters, Elsevier, vol. 19(1), pages 5-8.
- Gaudet, G. & Salant, S., 1988.
"Uniqueness Of Cournot Equilibrium: New Results From Old Methods,"
89-10, Michigan - Center for Research on Economic & Social Theory.
- Gérard Gaudet & Stephen W. Salant, 1991. "Uniqueness of Cournot Equilibrium: New Results From Old Methods," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 399-404.
- Gaudet, G. & Salant, S.W., 1988. "Uniqueness Of Cournot Equilibrium: New Results From Old Methods," Cahiers de recherche 8818, Université Laval - Département d'économique.
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