Location as an instrument for social welfare improvement in a spatial model of Cournot competition
ISSN: 0210-1521
Any de publicació: 2006
Volum: 30
Número: 1
Pàgines: 117-136
Tipus: Article
Altres publicacions en: Investigaciones económicas
Resum
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.