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LOCATION OF PUBLIC FACILITIES WITH SPILLOVER EFFECTS: VARIABLE LOCATION AND PARAMETRIC SCALE *
Author(s) -
Kuroda Tatsuaki
Publication year - 1989
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.1467-9787.1989.tb01245.x
Subject(s) - spillover effect , jurisdiction , scale (ratio) , variable (mathematics) , economics , facility location problem , location model , parametric statistics , microeconomics , public good , business , econometrics , operations research , geography , mathematics , statistics , mathematical analysis , cartography , political science , law
This paper studies the location of public facilities of two neighboring local governments which consider not only the influence of the land market but also the spillover effects that each jurisdiction may have on the other. We obtain the following results: (1) in most cases, one of the cities behaves as an isolated city in choosing the facility location while the other enjoys the spillover effect as a free rider; (2) we also find that the equilibrium location in the two noncooperative city case is not socially optimal except for a special case.