Imperfect competition and congestion in the city

André de Palma () and Stef Proost

No 2005003, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper presents a spatial model to study imperfect competition with congestion. The model is used to examine the price and wage setting of subcenters of a city. Residents live in a city while they shop and work in subcentres. Each subcenter offers one differentiated product and one differentiated workplace. Shopping and commuting from the city to the subcenter requires the use of transport infrastructure that can be congested. We show the existence of a Nash equilibrium in prices and wages and analyse the welfare impacts of congestion charging and infrastructure policies. This paper generalises the literature on imperfect competition with differentiated products as well as the literature on congestion pricing with imperfect competition.

Keywords: road pricing; product differentiation; location theory; new economic geography; congestion (search for similar items in EconPapers)
JEL-codes: L13 D43 R41 R3 (search for similar items in EconPapers)
Date: 2005-01-01
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http://www.core.ucl.ac.be/services/psfiles/dp05/dp2005_3.pdf (application/pdf)

Related works:
Working Paper: Imperfect competition and congestion in the City (2004)
Journal Article: Imperfect competition and congestion in the City (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:cor:louvco:2005003

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