SPATIAL PERFECT COMPETITION: A UNIFORM DELIVERED PRICING MODEL

Hiroshi Ohta (), Yan‐Shu Lin and Masa K. Naito

Pacific Economic Review, 2005, vol. 10, issue 4, 407-420

Abstract: Abstract. Spatial competition is often probed in terms of spatial oligopoly and/or monopolistic competition in the literature. This paper considers spatial competition as a form of perfect competition, in the sense that the firms are assumed to be price‐takers located at the centre of a market area and practising uniform pricing. It shows that under scale economy competitive equilibria can occur, and may actually be observed in the form of international price differentials. Both a very high price and a very low price can yield conditions of competitive equilibrium in spatially or otherwise separate markets.

Date: 2005
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