The Effect of Distance Metric on the Degree of Spatial Competition between Firms

G Rushton and Thill J-C
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G Rushton: Department of Geography, University of Iowa, Iowa City, IA 52242, USA
Thill J-C: Department of Geography, Catholic University of Louvain, 1348 Louvain-la-Neuve, Belgium

Environment and Planning A, 1989, vol. 21, issue 4, 499-507

Abstract: The proportion of a firm's market-area that is within a given, small, proportional difference in delivered-price between itself and its principal competitor, is an important measure of spatial competition. It is shown that for regular triangular and irregular spatial patterns of firms, areas of intense spatial competition are larger when transport costs are proportional to euclidean distances rather than to block distances, but this is not true for a regular square pattern. In an irregular pattern of firms, for each metric, the proportion of a firm's market-area in the area of intense spatial competition varies markedly from firm to firm. The locational and pricing behavior of firms is expected to be influenced by the size and locations of these areas of spatial competition.

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:21:y:1989:i:4:p:499-507

DOI: 10.1068/a210499

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