Spatial Competition of Two-level Hierarchical Transportation Systems under Economies of Scale in Transportation Cost

Kiheiji Nishida

MPRA Paper from University Library of Munich, Germany

Abstract: In this short paper, we consider how the hierarchical structure in transportation, in which goods are transported from demand points to nearby terminal stations in the first level of hierarchy and from station to station in the second, emerges in competition between transportation companies having economies of scale in volume and distance. We conmpare the competitive and planning locations of terminal stations of the hierarchical system using a Hotelling-style spatial competition model (1929). We find that a competitive location can be generated in an area where the planning location can never be generated. We also find no difference between the two when point-to-point transportation is replaced by transportation in bulk.

Keywords: Hierarchy system; Economy of scale in volume; Economy of scale in travelling distance; Competitive location; Planning location. (search for similar items in EconPapers)
JEL-codes: R41 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com, nep-tre and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:93063

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