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THE MOSES‐PREDOHL PULL AND THE LOCATION DECISION OF THE FIRM *
Author(s) -
Pace Kelley,
Shieh YeungNan
Publication year - 1988
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.1467-9787.1988.tb01201.x
Subject(s) - envelope (radar) , exploit , order (exchange) , zero (linguistics) , mathematical economics , computer science , mathematics , economics , philosophy , telecommunications , finance , linguistics , computer security , radar
This paper exploits the two‐stage approach and the envelope theorem to examine the role of the Moses‐Predhol pull in the cost‐minimizing location theory of the firm. It shows that the two‐stage approach introduces the Moses‐Predohl pull into the first‐order conditions. The Moses‐Predohl pull is shown to be equal to zero through the envelope theorem. These results show why the assertions of Bossert and Buhl (1986) concerning Kusumoto (1984,1985) are incorrect.