Oligopoly on a Salop Circle with Centre

Madden Paul () and Mario Pezzino ()
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Madden Paul: University of Manchester

The B.E. Journal of Economic Analysis & Policy, 2011, vol. 11, issue 1, 30

Abstract: We study an oligopolistic market in which consumers located around the perimeter of a Salop circle buy either from firms around this perimeter (providing horizontally differentiated goods) or from a firm located at the centre of the circle (providing a homogeneous good). An entry-pricing game is studied. The market equilibria and social optima indicate various possible market failures, including cases in which the market is served only by perimeter firms whilst central provision would be socially optimal (in this sense, more extreme than the standard Salop excessive product differentiation). Moreover, for some parameters, the standard Salop result might be reversed.

Keywords: differentiated products; homogenous product; social optimum (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (19)

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Working Paper: Oligopoly on a Salop circle with centre (2007)
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DOI: 10.2202/1935-1682.2440

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