Competition between Cities and Their Spatial Structure

Takanori Ago

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Spatial competition has dealt with a single city over which firms compete. This paper extends it to a model with multiple cities. Specifically, we construct a spatial Cournot model with circular cities where consumers can choose which city to go under the spatial distribution of firms as determined by a location-quantity game. As a result, firms can agglomerate at a point even in the circular cities in equilibrium due to their ability to enhance consumer surplus at their locating city and rob more consumers of the rival city if they agglomerate to commit to the lower price. A welfare analysis shows excess agglomeration.

Pages: 16 pages
Date: 2015-09
New Economics Papers: this item is included in nep-geo, nep-mkt and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/15e110.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:15110

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().