Input Specificity and Location

José Pontes

No 2005/01, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: In a two-region economy, two upstream firms supply an input to two consumer goods firms. For two different location patterns (site specificity and co-location of the suppliers), the firms play a three-stage game: the input suppliers select transport rates; then they choose outputs; finally the buyers select quantities of the consumer good. It is concluded that the site specificity of the input leads to a high transport cost and to its specialized adaptation to the needs of the local user.

Keywords: Technological Choice; Spatial Oligopoly; Vertically-linked Industries. (search for similar items in EconPapers)
JEL-codes: D43 R12 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-geo
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Citations: View citations in EconPapers (1)

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