Payoff interdependence and welfare-improving location diversification

Yi Liu and Toshihiro Matsumura

MPRA Paper from University Library of Munich, Germany

Abstract: We formulate a duopoly model with international location choice in the presence of global common ownership. We theoretically examine how payoff interdependence caused by overlapping ownership such as common and cross ownership affects location and production choices, and resulting welfare. We find that positive payoff interdependence enhances international location diversification, which may improve global welfare.

Keywords: Overlapping ownership; Transport costs; Welfare-improving production substitution; Spatial Cournot; Market-oriented location; Cost-oriented location (search for similar items in EconPapers)
JEL-codes: F12 L13 R32 (search for similar items in EconPapers)
Date: 2024-02-26
New Economics Papers: this item is included in nep-com, nep-ind, nep-mac and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:120495

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