Autor(es):
Pires, Cesaltina 
Data: 2005
Identificador Persistente: http://hdl.handle.net/10174/2259
Origem: Repositório Científico da Universidade de Évora
Assunto(s): Delivered pricing; Spatial competition
Detalhes do Documento
Constrained efficient locations under delivered pricing
Descrição
In this article, we extend previous results on competitive delivered pricing by considering the second-best problem in which the social planner can regulate firm’s locations but not their pricing. Assuming constant marginal costs, we show that the constrained socially optimal locations are an equilibrium of the location-price game when: (i) demand is perfectly inelastic and (ii) demand is price sensitive but firms practice first-degree price discrimination. However, with elastic demand and linear delivered pricing, the market equilibrium provides too much spatial differentiation.
In this article, we extend previous results on competitive delivered pricing by considering the second-best problem in which the social planner can regulate firm’s locations but not their pricing. Assuming constant marginal costs, we show that the constrained socially optimal locations are an equilibrium of the location-price game when: (i) demand is perfectly inelastic and (ii) demand is price sensitive but firms practice first-degree price discrimination. However, with elastic demand and linear delivered pricing, the market equilibrium provides too much spatial differentiation.
Tipo de Documento
Artigo
Idioma Inglês
Editor(es) Elsevier
Idioma Inglês
Editor(es) Elsevier
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