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Spatial competition in networks under delivered pricing

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  • Pablo Dorta‐González
  • Dolores R. Santos‐Peñate
  • Rafael Suárez‐Vega

Abstract

. We consider a two‐stage non‐cooperative Bertrand game with location choice involving r firms. There are n spatially separated markets located at the vertices of a network. Each firm first selects the location of a facility and then selects the delivered price in the markets in order to maximise its profit. The article extends the duopolistic model with completely inelastic demand (Lederer and Thisse 1990) to the oligopolistic scenario. Under moderate assumptions, a pure strategy equilibrium, which minimises social costs, exists. Furthermore, an equilibrium location can be obtained by finite steps and consists of vertices only.

Suggested Citation

  • Pablo Dorta‐González & Dolores R. Santos‐Peñate & Rafael Suárez‐Vega, 2005. "Spatial competition in networks under delivered pricing," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 271-280, June.
    • Handle: RePEc:bla:presci:v:84:y:2005:i:2:p:271-280
    DOI: 10.1111/j.1435-5957.2005.00017.x
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    References listed on IDEAS

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    1. Phlips,Louis, 1983. "The Economics of Price Discrimination," Cambridge Books, Cambridge University Press, number 9780521283946, September.
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    Cited by:

    1. Drezner, Zvi & Eiselt, H.A., 2024. "Competitive location models: A review," European Journal of Operational Research, Elsevier, vol. 316(1), pages 5-18.
    2. Pelegrín, Blas & Fernández, Pascual & Dolores García Pérez, María & Cano Hernández, Saúl, 2012. "On the location of new facilities for chain expansion under delivered pricing," Omega, Elsevier, vol. 40(2), pages 149-158, April.
    3. Hiroshi Aiura & Toshiki Kodera, 2024. "Location-price competition with freight absorption pricing in a data sharing economy," SN Business & Economics, Springer, vol. 4(1), pages 1-19, January.
    4. Díaz-Báñez, J.M. & Heredia, M. & Pelegrín, B. & Pérez-Lantero, P. & Ventura, I., 2011. "Finding all pure strategy Nash equilibria in a planar location game," European Journal of Operational Research, Elsevier, vol. 214(1), pages 91-98, October.

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