Iceberg Transport Costs I. Monopoly

Xavier Martinez-Giralt () and J.M. Usategui

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We present a model of spatial competition where transport costs are dependent on the price the monopolist sets in the market. Several specifications of the transport costs are modeled. We find that, in contrast with a standard Hotelling model, the monoplist decides to cover all the market ragardless of both the reservation price and the size of the market in all cases but one.

Keywords: MONOPOLIES (search for similar items in EconPapers)
JEL-codes: L12 D42 (search for similar items in EconPapers)
Date: 1997

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Persistent link: http://EconPapers.repec.org/RePEc:aub:autbar:399.97

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