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- Title
Spatial competition in networks under delivered pricing.
- Authors
Dorta-González, Pablo; Santos-Peñate, Dolores R.; Suárez-Vega, Rafael
- Abstract
We consider a two-stage non-cooperative Bertrand game with location choice involving r firms. There are n spatially separated markets located at the vertices of a network. Each firm first selects the location of a facility and then selects the delivered price in the markets in order to maximise its profit. The article extends the duopolistic model with completely inelastic demand ( ) to the oligopolistic scenario. Under moderate assumptions, a pure strategy equilibrium, which minimises social costs, exists. Furthermore, an equilibrium location can be obtained by finite steps and consists of vertices only.
- Subjects
ECONOMIC competition; PRICING; ECONOMIC equilibrium; OLIGOPOLIES; MARKETS; INELASTIC demand
- Publication
Papers in Regional Science, 2005, Vol 84, Issue 2, p271
- ISSN
1056-8190
- Publication type
Article
- DOI
10.1111/j.1435-5957.2005.00017.x