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Firm location and monopolistic competition
Author(s) -
Ago Takanori,
Hamoudi Hamid,
Lefouili Yassine
Publication year - 2017
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/pirs.12173
Subject(s) - monopolistic competition , economies of agglomeration , symmetric equilibrium , partial equilibrium , distribution (mathematics) , economics , spatial distribution , competition (biology) , function (biology) , general equilibrium theory , microeconomics , mathematics , equilibrium selection , monopoly , mathematical analysis , game theory , statistics , ecology , repeated game , biology , evolutionary biology
This paper investigates the equilibrium spatial distributions of firms in a circular city under monopolistic competition. We show that the uniform distribution constitutes an equilibrium for a very general class of transport cost functions. Moreover, we establish that symmetric partial agglomeration arises as an equilibrium if and only if the transport cost function is linear and the number of locations is even. We also find that all rotationally symmetric distributions with continuous support are spatial equilibria if the transport costs are linear. This multiplicity of equilibria however disappears in the case of strictly concave transport costs: the uniform distribution is then the unique spatial equilibrium distribution with continuous support.