Delivered Pricing, Positive Externalities and Firm Dispersion

Barnali Gupta ()
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Barnali Gupta: Miami University

Economics Bulletin, 2008, vol. 12, issue 32, 1-6

Abstract: This note examines firm locations in a delivered pricing model with positive production externalities. We find that, quite counter intuitively, firms will disperse rather than move closer, when production externalities are positive and reciprocal. Furthermore, we see a divergence between the private and social optimal locations, which is in contrast to the coincidence of these locations in the standard delivered pricing model.

Keywords: Location; dispersion (search for similar items in EconPapers)
JEL-codes: L1 (search for similar items in EconPapers)
Date: 2008-11-12
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