The circular city model and the linear city model are extended to allow for asymmetric directional transportation costs. A two-stage location-then-quantity model is proposed. We show that in the circular city model maximal dispersion arises in equilibrium, while in the linear city model the unique equilibrium is represented by both firms agglomerating in a non-central point of the segment.
Colombo, S., Spatial Cournot competition with non-extreme directional constraints, <<THE ANNALS OF REGIONAL SCIENCE>>, 2013; (N/A): 761-774. [doi:10.1007/s00168-013-0560-6] [http://hdl.handle.net/10807/53634]
Spatial Cournot competition with non-extreme directional constraints
Colombo, Stefano
2013
Abstract
The circular city model and the linear city model are extended to allow for asymmetric directional transportation costs. A two-stage location-then-quantity model is proposed. We show that in the circular city model maximal dispersion arises in equilibrium, while in the linear city model the unique equilibrium is represented by both firms agglomerating in a non-central point of the segment.
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