Optimal Transportation Policy with Strategic Locational Choice

Jacques Thisse and David Wildasin

No 933, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper presents a model of strategic locational choice by duopolistic firms in an urban area where consumer locations are endogenous and where a public facility is exogenously fixed. A welfare analysis taking their strategic behaviour into account is conducted. It is shown that the firms' equilibrium locations often differ from the optimal locations which, in contrast to standard location theory, are not at the quartiles of the urban area. Corrective transportation taxes or subsidies can be used to support an optimal locational structure. Changes in transportation costs require unit-for-unit offsetting changes in transportation taxes or subsidies.

Keywords: Firm Location; Public Facility; Transportation Policy; Urban Structure (search for similar items in EconPapers)
JEL-codes: H21 H54 R30 R48 (search for similar items in EconPapers)
Date: 1994-04
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=933 (application/pdf)

Related works:
Journal Article: Optimal transportation policy with strategic locational choice (1995)
Working Paper: Optimal transportation policy with strategic locational choice (1995)
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: https://EconPapers.repec.org/RePEc:cpr:ceprdp:933

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=933

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().