Economics at your fingertips  

A Model of Three Cities

Stefano Colombo ()

International Regional Science Review, 2016, vol. 39, issue 4, 386-416

Abstract: We develop a spatial model representing three cities of different size and connected by a road. We study two versions of a two-stage game where firms first decide where to locate and then set quantities or prices. We show that, in the case of quantity competition, maximal dispersion or agglomeration arises. Also, multiple equilibria are possible. In the case of price competition, maximal dispersion or partial dispersion arises. An asymmetric spatial equilibrium is possible even if the model is completely symmetric ex ante. A number of results are also derived when comparing the Cournot and the Bertrand locational equilibria in terms of profits, consumer surplus, and total welfare, and with respect to the welfare-maximizing locations.

Keywords: spatial models; cities (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in International Regional Science Review
Bibliographic data for series maintained by SAGE Publications ().

Page updated 2020-10-19
Handle: RePEc:sae:inrsre:v:39:y:2016:i:4:p:386-416