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We study the impact of the urban location of one single public fa- cility on spatial competition àl a Hotelling. If transportation costs are very low compared to the value of the public service then both firms tacitly choose the facility location without moderation of price com- petition, in contrast to mainstream results in the literature. In this event, minimum differentiation is efficient. For intermediate values of the relative transportation rate, inefficient partially-dispersed equilib- ria emerge with one firm at the facility site while its competitor locates at one end of the linear city. We also analyze the welfare impacts of changes, successively, in the facility location and the transportation rate, taking into accountfirms relocations.

Urban Public Facility Location, Multipurpose Trips and Spatial Competition: Equilibrium and Welfare Analysis