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Spatial Pricing, Spatial Rents, and Spatial Welfare

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  • Timothy J. Gronberg
  • Jack Meyer

Abstract

This paper presents a model of spatial equilibrium that integrates elements of spatial pricing and Thünen location models. Properties of equilibrium under mill, uniform, and discriminatory pricing regimes are explored. Three comparative propositions concerning firm, consumer, and landowner welfare that obtain under the alternative pricing schemes are presented. The welfare findings contrast with those found in the extant spatial pricing literature. In particular, the superiority of mill pricing from a consumer welfare perspective is questioned.

Suggested Citation

  • Timothy J. Gronberg & Jack Meyer, 1982. "Spatial Pricing, Spatial Rents, and Spatial Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 633-644.
    • Handle: RePEc:oup:qjecon:v:97:y:1982:i:4:p:633-644.
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    File URL: http://hdl.handle.net/10.2307/1885103
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    Cited by:

    1. Nathan H. Miller & Matthew Osborne, 2014. "Spatial differentiation and price discrimination in the cement industry: evidence from a structural model," RAND Journal of Economics, RAND Corporation, vol. 45(2), pages 221-247, June.
    2. 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.
    3. Hemanta Shrestha & Dennis Heffley, 2003. "Regional Integration and Industrial Location in a Landlocked Spatial Economy," Working papers 2003-07, University of Connecticut, Department of Economics.
    4. Cyrus Chu, C. Y. & Lu, Huei-chung, 1998. "The multi-store location and pricing decisions of a spatial monopoly," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 255-281, May.

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