Endogenous R&D spillovers and locational choice with discriminatory pricing | Zendy

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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

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.

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