Agglomeration in a Vertically-linked Oligopoly

José Pontes

No 2004/06, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper examines the location of three vertically-linked firms. In a spatial economy composed of two regions, a monopolist firm supplies an input to two consumer goods firms that compete in quantities. The interaction between the firms is modelled by means of a three-stage game, where the firms first select locations, then the upstream firm chooses thedelivered prices of the intermediate good, and finally the downstream firms select quantities of the final good. It is concluded that agglomeration is more likely to occur when the ratio between the transport cost of the intermediate good and the transport cost of the final good is higher. If this proportion is low, the existence of an agglomeration varies nonmonotonically with transport costs.

Keywords: Agglomeration; Intermediate Goods; Spatial Oligopoly. (search for similar items in EconPapers)
JEL-codes: C72 L13 R30 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-geo
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://depeco.iseg.ulisboa.pt/wp/wp062004.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:ise:isegwp:wp62004

Access Statistics for this paper

More papers in Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa Department of Economics, ISEG - Lisbon School of Economics and Management, Universidade de Lisboa, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL.
Bibliographic data for series maintained by Vitor Escaria ().