Premium
Endogenous R&D spillovers and locational choice with discriminatory pricing
Author(s) -
Piga Claudio,
PoyagoTheotoky Joanna
Publication year - 2004
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1137
Subject(s) - price discrimination , economics , microeconomics , function (biology) , the internet , econometrics , computer science , evolutionary biology , world wide web , biology
Abstract We present a model of spatial price discrimination where R&D spillovers are endogenous as they depend on firms' location. We establish that both the distance between locations and R&D efforts are an increasing function of the transportation cost coefficient and show that there is a continuum of cases where firms will choose an intermediate location. The managerial implications from the model are discussed using examples of marketing behavior by Internet retailers. Copyright © 2004 John Wiley & Sons, Ltd.