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- Title
Bertrand-Nash mill pricing and the locations of two firms with partially overlapping product selections.
- Authors
Braid, Ralph M.
- Abstract
This paper assumes Bertrand-Nash-mill-price competition between two firms on a unit interval, with each firm selling two out of three products, and transportation costs that are proportional to distance squared. If c consumers per unit length desire each monopoly product, and b per unit length desire the duopoly product, then the equilibrium locations of the two firms are more centralized the higher the ratio c/b, more centralized than the socially optimal locations for c/b above a critical value, and completely centralized for c/b above a different critical value. A number of variations of the model are also presented.
- Subjects
PRICING; ECONOMIC competition; TRANSPORTATION rates; NASH equilibrium; COMMERCIAL products
- Publication
Papers in Regional Science, 2011, Vol 90, Issue 1, p197
- ISSN
1056-8190
- Publication type
Article
- DOI
10.1111/j.1435-5957.2010.00329.x