On Modeling Transport Costs

José M. Usategui and Xavier Martínez-Giralt
Authors registered in the RePEc Author Service: Xavier Martinez-Giralt

No 277, Working Papers from Barcelona School of Economics

Abstract: The interpretation of the loss of utility as transport costs in address models of differentiation poses a methodological difficulty. Transport costs implicitly amounts to assume that there is a good neither included in the differentiated sector nor in the composite (numeraire) good of the economy. We propose to use iceberg-type transport costs to solve this difficulty.

Keywords: spatial competition; iceberg transport costs; monopoly (search for similar items in EconPapers)
JEL-codes: D42 L12 (search for similar items in EconPapers)
Date: 2015-09
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