Premium
Product Differentiation and Location Choice in a Circular City *
Author(s) -
Gupta Barnali,
Pal Debashis,
Sarkar Jyotirmoy
Publication year - 2006
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.0022-4146.2006.00443.x
Subject(s) - duopoly , economies of agglomeration , product differentiation , cournot competition , product (mathematics) , competition (biology) , regular polygon , set (abstract data type) , economics , microeconomics , mathematics , mathematical economics , computer science , geometry , ecology , programming language , biology
. The paper analyzes spatial competition among firms that sell substitute and/or complementary products. The firms first choose locations on the perimeter of a circular city and then compete in quantities (à la Cournot). Both linear and convex (quadratic) transport costs are considered. In general, multiple location equilibria are encountered. Complete agglomeration, partial agglomeration, and complete dispersion are possible. Convex (quadratic) transport cost substantially shrinks the set of equilibria obtained under linear transport cost. In general, the results obtained for a larger number of firms selling complementary products are strikingly different from those obtained under a duopoly.