Green zoning regulation under price discrimination

Hamid Hamoudi () and María José Moral ()
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Hamid Hamoudi: Department of Foundations of Economic Analysis, Faculty of Legal and Social Sciences, University of King Juan Carlos, Madrid, Spain

Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, 2017, vol. 35, issue 1, 151-171

Abstract: This study aims to examine urban zoning within a linear city in a Bertrand duopolistic competition framework with price discrimination and linear transportation costs. It analyses the effects of introducing an environmental area where economic and residential activity are not allowed. The welfare function used to determine the optimal size of the green area allows for a possible regulator’s bias in favour of firms/consumers. It is shown that location-price competition can be either reduced or increased depending on the size of the green area. The results indicate when a regulator implements green zoning, under linear transportation costs, influences the optimal location of firms (because these locations depend on the size of the green zone). In consequence, zoning may be used as an effective industrial or urban policy tool.

Keywords: spatial discrimination; duopoly; zoning; environmental effects (search for similar items in EconPapers)
JEL-codes: D43 L13 Q58 R38 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rfe:zbefri:v:35:y:2017:i:1:p:151-171

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