Spatial dispersion in cournot competition
ISSN: 1435-5469
Year of publication: 2000
Volume: 2
Issue: 2
Pages: 145-152
Type: Article
More publications in: Spanish economic review
Abstract
Abstract. This paper considers the spatial model used by Anderson and Neven (1991) to study firms' decisions on locations without restricting the consumers' reservation price. We note that the pattern of locations varies as the reservation price for a fixed transportation rate decreases. For a high enough reservation price, we find Anderson and Neven (1991)'s result where firms group at the center of the market and serve all consumers. As the reservation price falls, firms start to move away from each other, increasing the quantities shipped to the consumers close to their locations.