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Endogenous R&D spillovers and locational choice with discriminatory pricing

Claudio Piga () and Joanna Poyago-Theotoky

Managerial and Decision Economics, 2004, vol. 25, issue 3, 157-161

Abstract: We present a model of spatial price discrimination where R&D spillovers are endogenous as they depend on firms' location. We establish that both the distance between locations and R&D efforts are an increasing function of the transportation cost coefficient and show that there is a continuum of cases where firms will choose an intermediate location. The managerial implications from the model are discussed using examples of marketing behavior by Internet retailers. Copyright © 2004 John Wiley & Sons, Ltd.

Date: 2004
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