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Cournot competition in spatial markets: Some further results *
Author(s) -
Yu ChiaMing,
Lai FuChuan
Publication year - 2003
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1007/s10110-003-0154-2
Subject(s) - economies of agglomeration , cournot competition , duopoly , complementarity (molecular biology) , price dispersion , economics , point (geometry) , competition (biology) , microeconomics , contrast (vision) , spatial dispersion , industrial organization , mathematics , geometry , computer science , ecology , genetics , physics , artificial intelligence , optics , biology
Abstract. In contrast to most of the literature on a circular market in which firms choose to disperse equally from each other in equilibrium, this research note shows that the equal‐distance dispersion in a circular market results from the substitutability of products produced by two single‐plant duopoly firms. Meanwhile, agglomeration at one point results from complementarity. In the multi‐plant duopoly case, we find – in contrast to Chamorro‐Rivas (2000) – that when firms sell complements, the equilibrium locations tend to exhibit both inter‐firm agglomeration and intra‐firm dispersion. In other words, the location layout in equilibrium exhibits spatial agglomeration (by pairs) finitely at many points.