IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/1992031.html
   My bibliography  Save this paper

Competitive spatial price discrimination with capacity constraints

Author

Listed:
  • HAMILTON, Jonathan

    (Department of Economics, University of Florida, USA)

  • THISSE , Jacques-François

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

Abstract

A model of duopolistic spatial price discrimination on a network is extended by adding capacity constraints on firms'outputs. With zero-one consumer demands, some configurations of capacity levels and locations do not have pure strategy Nash equilibria in price schedules, in particular when firms have some excess capacity but not enough to serve the entire market individually. An alternative to the mixed strategy Nash equilibrium in price schedules - the core of the market game among producers and consumers - is described and shown to have allocations corresponding to pure strategies for all location and capacity configurations. If both firms have some excess capacity, price schedules are identical to those in the uncapacitated problem. Equilibrium prices are no higher than the lowest prices in the mixed strategy Nash equilibria.

Suggested Citation

  • HAMILTON, Jonathan & THISSE , Jacques-François, 1992. "Competitive spatial price discrimination with capacity constraints," LIDAM Discussion Papers CORE 1992031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1992031
    as

    Download full text from publisher

    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1992.html
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Phillip J. Lederer, 2020. "Location-Price Competition with Delivered Pricing and Elastic Demand," Networks and Spatial Economics, Springer, vol. 20(2), pages 449-477, June.
    2. Hunold, Matthias & Muthers, Johannes, 2019. "Spatial competition and price discrimination with capacity constraints," International Journal of Industrial Organization, Elsevier, vol. 67(C).

    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

    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:cor:louvco:1992031. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.