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A Noncooperative Shipping Cournot Duopoly With Linear‐Quadratic Transport Costs And Circular Space

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  • TOSHIHIRO MATSUMURA
  • DAISUKE SHIMIZU

Abstract

The mixed strategy equilibria in a location quantity duopoly model with circular markets are investigated. We find that a continuum of equilibria exists when the transport cost function is linear. However, if costs are strictly concave or convex, most strategies fail to qualify as equilibria. For any integer n, there are nondegenerate mixed strategy equilibria in which each firm locates at n possible locations with equal probability. This result explains possible outcomes in which firms’ on‐path locations are not minimally or maximally differentiated.

Suggested Citation

  • Toshihiro Matsumura & Daisuke Shimizu, 2008. "A Noncooperative Shipping Cournot Duopoly With Linear‐Quadratic Transport Costs And Circular Space," The Japanese Economic Review, Japanese Economic Association, vol. 59(4), pages 498-518, December.
    • Handle: RePEc:bla:jecrev:v:59:y:2008:i:4:p:498-518
    DOI: 10.1111/j.1468-5876.2008.00428.x
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    1. Colombo, Stefano, 2011. "On the rationale of spatial discrimination with quantity-setting firms," Research in Economics, Elsevier, vol. 65(3), pages 254-258, September.
    2. Toshihiro Matsumura & Noriaki Matsushima, 2012. "Spatial Cournot competition and transportation costs in a circular city," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 33-44, February.
    3. Toshihiro Matsumura & Daisuke Shimizu, 2015. "Endogenous Flexibility In The Flexible Manufacturing System," Bulletin of Economic Research, Wiley Blackwell, vol. 67(1), pages 1-13, January.
    4. Chia-Hung Sun & Jyh-Fa Tsai & Fu-Chuan Lai, 2017. "Spatial Cournot competition in a circular city with more than two dispatches," The Japanese Economic Review, Japanese Economic Association, vol. 68(4), pages 413-442, December.
    5. Stefano Colombo, 2016. "A Model of Three Cities," International Regional Science Review, , vol. 39(4), pages 386-416, October.

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