On the Existence of Spatial Monopolies Under Free Entry

Yves Zenou and Sebastien Steinmetz ()
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Sebastien Steinmetz: INRA-Grignon, Laboratoire d'Econometrie de l''Ecole Polytechnique

Economics Bulletin, 2001, vol. 4, issue 8, 1-10

Abstract: This paper studies the question of entry in the circular city model when the pre-entry market structure involves local monopolies. In contrast with Salop (1979), we show that the unit profit rate of incumbent monopolists is strictly positive and bounded above. The upper bound decreases with the size of gaps and with the number of incumbents.

Keywords: entry (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2001-08-01
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: On the existence of spatial monopolies under free entry (1999)
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