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A COMPUTATIONAL PROCEDURE FOR DETERMINATION OF OLIGOPOLISTIC SPATIAL PRICE EQUILIBRIUM
Author(s) -
Miyagi Toshihiko
Publication year - 1991
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 - 10.1111/j.1435-5597.1991.tb01727.x
Subject(s) - inverse demand function , marginal cost , cournot competition , oligopoly , economics , mathematical optimization , function (biology) , space (punctuation) , regular polygon , constant (computer programming) , variable cost , variable (mathematics) , production (economics) , mathematical economics , microeconomics , econometrics , mathematics , computer science , demand curve , mathematical analysis , geometry , evolutionary biology , programming language , biology , operating system
The primary purpose of this paper is to develop a computational procedure for finding the Cournot equilibrium for a case in which many firms located at different points in space compete in many different markets located at different points in space. The model investigated here allows for the‐ fact that not all firms sell to all regions. The algorithm is first developed under the assumptions (a) that the inverse demand function in each market is convex, and (b) that production costs of each firm are composed of a fixed cost and a constant marginal cost. It is shown that the proposed method with the convex combination algorithm is applicable to a spatial pricing model with variable marginal‐cost functions.