A network-city model of spatial competition

Tao Wang and Ruqu Wang

Economics Letters, 2018, vol. 170, issue C, 168-170

Abstract: In this paper, we analyze a spatial Bertrand oligopoly model called network-city model. Firms compete directly and simultaneously with all other firms. In the model, we allow for heterogeneous product differentiation, heterogeneous constant marginal costs of production, and heterogeneous consumer densities. We show that the equilibrium is unique and easily computable. Our model is more general than the existing spatial models, and more importantly, our model provides a spatial microfoundation for the traditional linear demand functions in a differentiated Bertrand oligopoly.

Keywords: Location model; Product differentiation; Network city (search for similar items in EconPapers)
JEL-codes: D21 D43 L13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:170:y:2018:i:c:p:168-170

DOI: 10.1016/j.econlet.2018.06.023

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