Spatial Discrimination with Quantity Competition and High Transportation Costs: a Note
Alessandra Chirco (),
Marcella Scrimitore () and
Economics Bulletin, 2007, vol. 12, issue 1, 1-7
In this paper we extend the analysis of the standard model of spatial discrimination with quantity competition along the linear city to the case in which the unit transportation cost is greater than one. We show that in such a case the unique subgame perfect Nash equilibrium in locations is a dispersed symmetric equilibrium. Moreover, at this equilibrium firms' locations are not monotone in the transportation cost parameter.
Keywords: Market; Coverage (search for similar items in EconPapers)
JEL-codes: L1 R3 (search for similar items in EconPapers)
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