Two-dimensional spatial Cournot competition with hyperbolic demand

Takanori Ago ()
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Takanori Ago: Senshu University

Letters in Spatial and Resource Sciences, 2025, vol. 18, issue 1, No 19, 16 pages

Abstract: Abstract We analyze location decisions in a two-dimensional space in spatial Cournot competition based on Colombo’s (Pap Reg Sci 95:215–226, 2016) one-dimensional model. We adopt hyperbolic demand to generate centrifugal forces, and assume iceberg transport costs for analytical tractability. Consequently, we find that the agglomerated (dispersed) equilibrium has a tendency for low (high) transport costs, which is similar to Colombo (2016). We also show significant similarities and subtle differences with the two-dimensional Bertrand model by Tabuchi (Reg Sci Urban Econ 24:207–227, 1994), where firms differentiate only in one dimension in equilibrium.

Keywords: Spatial Cournot; Two-dimensional space; Hyperbolic demand (search for similar items in EconPapers)
JEL-codes: D43 L13 R12 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s12076-025-00415-0

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