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Spatial price discrimination and the locations of firms with different product selections or product varieties

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  • Braid, Ralph M.

Abstract

The equilibrium locations of two firms are partially centralized to the socially optimal extent if there is spatial price discrimination, and if each firm has two out of three products, or else one variety of a differentiated product with some consumers indifferent between varieties.

Suggested Citation

  • Braid, Ralph M., 2008. "Spatial price discrimination and the locations of firms with different product selections or product varieties," Economics Letters, Elsevier, vol. 98(3), pages 342-347, March.
    • Handle: RePEc:eee:ecolet:v:98:y:2008:i:3:p:342-347
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    1. Lederer, Phillip J & Hurter, Arthur P, Jr, 1986. "Competition of Firms: Discriminatory Pricing and Location," Econometrica, Econometric Society, vol. 54(3), pages 623-640, May.
    2. B. Curtis Eaton & Richard G. Lipsey, 1975. "The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(1), pages 27-49.
    3. Hamilton, Jonathan H. & Thisse, Jacques-Francois & Weskamp, Anita, 1989. "Spatial discrimination : Bertrand vs. Cournot in a model of location choice," Regional Science and Urban Economics, Elsevier, vol. 19(1), pages 87-102, February.
    4. MacLeod, W.B. & Norman, G. & Thisse, J.-F., 1988. "Price discrimination and equilibrium in monopolistic competition," International Journal of Industrial Organization, Elsevier, vol. 6(4), pages 429-446.
    5. Braid, Ralph M., 2006. "The equilibrium locations of three stores with different selections of differentiated products," Economics Letters, Elsevier, vol. 93(1), pages 31-36, October.
    6. Osborne, Martin J & Pitchik, Carolyn, 1987. "Equilibrium in Hotelling's Model of Spatial Competition," Econometrica, Econometric Society, vol. 55(4), pages 911-922, July.
    7. Eaton, B Curtis & Schmitt, Nicolas, 1994. "Flexible Manufacturing and Market Structure," American Economic Review, American Economic Association, vol. 84(4), pages 875-888, September.
    8. Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(1), pages 27-41.
    9. Gupta, Barnali, 1992. "Sequential entry and deterrence with competitive spatial price discrimination," Economics Letters, Elsevier, vol. 38(4), pages 487-490, April.
    10. A. P. Lerner & H. W. Singer, 1937. "Some Notes on Duopoly and Spatial Competition," Journal of Political Economy, University of Chicago Press, vol. 45(2), pages 145-145.
    11. Braid, Ralph M., 1999. "The socially optimal locations of three stores with stockouts or limited product selections," Economics Letters, Elsevier, vol. 64(3), pages 363-368, September.
    12. Edgar M. Hoover, 1937. "Spatial Price Discrimination," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(3), pages 182-191.
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    Citations

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    Cited by:

    1. Eleftheriou, Konstantinos & Michelacakis, Nickolas J. & Papavassiliou, Vassilios G., 2016. "Addendum to Eleftheriou and Michelacakis (2016)," Economics Letters, Elsevier, vol. 148(C), pages 53-54.
    2. Ralph Braid, 2013. "The locations of firms on intersecting roadways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 791-808, June.
    3. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2015. "Vertical Mergers and Downstream Spatial Competition with Different Product Varieties, Revised and Corrected," MPRA Paper 68107, University Library of Munich, Germany.
    4. Ziying Yang & Félix Muñoz-García, 2018. "Can Banning Spatial Price Discrimination Improve Social Welfare?," Journal of Industry, Competition and Trade, Springer, vol. 18(2), pages 223-243, June.
    5. Ralph Braid, 2014. "The socially optimal and equilibrium locations of two stores or libraries with consumer search," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 123-136, August.
    6. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2015. "A Unified Model of Spatial Price Discrimination," MPRA Paper 66557, University Library of Munich, Germany.
    7. Konstantinos Eleftheriou & Nickolas J. Michelacakis, 2020. "Location decisions and welfare under spatial price discrimination," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1202-1210, October.
    8. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Sequential spatial competition in vertically related industries with different product varieties," Economics Letters, Elsevier, vol. 106(2), pages 112-114, February.
    9. Beladi, Hamid & Chakrabarti, Avik & Hollas, Daniel, 2016. "A public firm in a vertically linked price discriminating spatial duopoly," Economic Systems, Elsevier, vol. 40(1), pages 59-63.
    10. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Cross-border merger, vertical structure, and spatial competition," Economics Letters, Elsevier, vol. 109(2), pages 112-114, November.
    11. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2014. "A public firm in a model of spatial duopoly with price discrimination," Economics Letters, Elsevier, vol. 123(1), pages 79-81.
    12. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2016. "A Comment on "Sequential Spatial Competition in Vertically Related Industries with Different Product Varieties"," MPRA Paper 73485, University Library of Munich, Germany.
    13. Michelacakis, Nickolas J., 2023. "Nash versus consistent equilibrium: A comparative perspective on a mixed duopoly location model of spatial price discrimination with delegation," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    14. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2017. "Spatial Price Discrimination and Privatization on Vertically Related Markets," MPRA Paper 76964, University Library of Munich, Germany.
    15. Hrachya Kyureghian & Maria Plotnikova & Sudipta Sarangi, 2013. "When Consumers and Firms Share Transportation Costs," Studies in Microeconomics, , vol. 1(1), pages 91-111, June.
    16. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2015. "Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination," MPRA Paper 63893, University Library of Munich, Germany.
    17. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2008. "Vertical mergers and downstream spatial competition with different product varieties," Economics Letters, Elsevier, vol. 101(3), pages 262-264, December.

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