Location as an instrument for social welfare improvement in a spatial model of Cournot competition
ISSN: 0210-1521
Ano de publicación: 2006
Volume: 30
Número: 1
Páxinas: 117-136
Tipo: Artigo
Outras publicacións en: Investigaciones económicas
Resumo
Two-stage models are the main frameworks in the analysis of oligopolistic competition. Literature has discussed some properties of such models when Cournot competition occurs in the second stage and assuming a non-spatial context. It .nds that private and social optima are asymmetric. Using spatial behavior with multiple marketplaces, the outcome is di erent. A social planner can use the location variable as an instrument for reallocating production from the equilibrium spatial pattern to the optimal outcome while maintaining the symmetry of the model.