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STRATEGIC CONSUMER LOCATION IN SPATIAL COMPETITION MODELS

Nikolaos Georgantzís (), Aurora García Gallego () and Vicente Orts
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Aurora García Gallego: Universitat Jaume I

Authors registered in the RePEc Author Service: Aurora García-Gallego ()

Working Papers. Serie EC from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: We consider a number of individual, discrete consumers, deciding their location on Hotelling's line in a non-cooperative way. Agglomeration emerges as a non-cooperative equilibrium, implying high transportation costs. No restriction is required concerning the functional forrn of transport costs except that they increase with the distance. In a two-dimensional market and a two-complementary-products- four-firm version of the model, the importance of transportation costs for consumer location is recovered, with consumer location determined by the interaction of two factors: minimisation of transportation costs and the intensity-ofcompetition effect of consumer agglomeration. Se considera un número de consumidores que deciden su localización sobre la línea de Hotelling en una manera no cooperativa. El resultado del equilibrio iio cooperativo es la aglomeración que, además, implica altos costes de transporte. No se impone ninguna restricción sobre la función de costes de transporte, excepto la de ser creciente respecto a la distancia. La importancia de los costes de transporte en la ubicación de los consumidores se recupera en una versión bi-dimensional del modelo, con dos bienes complementarios y cuatro empresas. La localización del consumidor se obtiene de la interacción entre dos factores: la minimización de los costes de transporte y el efecto de estimulo de la competencia de la aglomeración de los consumidores.

Keywords: aglomeración; localización de consumidores; efecto de estimulo de la competencia; competencia espacial. agglomeration; consmer location; intensity-ofcompetition effect; spatial competition. (search for similar items in EconPapers)
Pages: 27 pages
Date: 1995-11
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasec:1995-17

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