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Cournot Competition Yields Spatial Agglomeration

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  • Anderson, Simon P
  • Neven, Damien J

Abstract

Most theoretical models of spatial competition show a strong tendency toward spatial dispersion of firms, yet common observations suggest that firms tend to agglomerate. In this paper, the authors show that competition between Cournot-type oligopolists that discriminate over space leads to spatial agglomeration. One implication is that firms do not (necessarily) earn supernormal profits at the free-entry equilibrium. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Anderson, Simon P & Neven, Damien J, 1991. "Cournot Competition Yields Spatial Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 793-808, November.
    • Handle: RePEc:ier:iecrev:v:32:y:1991:i:4:p:793-808
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