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Cournot competition in spatial markets: Some further results

Chia-Ming Yu and Fu-Chuan Lai ()

Papers in Regional Science, 2003, vol. 82, issue 4, 569-580

Abstract: In contrast to most of the literature on a circular market in which firms choose to disperse equally from each other in equilibrium, this research note shows that the equal-distance dispersion in a circular market results from the substitutability of products produced by two single-plant duopoly firms. Meanwhile, agglomeration at one point results from complementarity. In the multi-plant duopoly case, we find - in contrast to Chamorro-Rivas (2000) - that when firms sell complements, the equilibrium locations tend to exhibit both inter-firm agglomeration and intra-firm dispersion. In other words, the location layout in equilibrium exhibits spatial agglomeration (by pairs) finitely at many points. Copyright Springer-Verlag Berlin/Heidelberg 2003

Keywords: Cournot model; spatial competition; differentiated products (search for similar items in EconPapers)
Date: 2003
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