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Spatial Pricing with Differentiated Products

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  • George Norman

Abstract

This paper generalizes analysis of spatial pricing policies to cases in which oligopolists produce differentiated products. It is shown that spatial price discrimination through freight absorption is affected by the number of competitive firms, the extent to which their products are substitutes, and by the locations such firms adopt in the market. It is further shown, however, that spatial price discrimination may be the consequence of collusive agreements, or of attempts to anticipate competitors' actions. The simple (spaceless) foundations of current policies on spatial pricing need to be reexamined, but this reexamination must take into account interconnections between producers, the extent to which their products are differentiated, and their locations.

Suggested Citation

  • George Norman, 1983. "Spatial Pricing with Differentiated Products," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 291-310.
    • Handle: RePEc:oup:qjecon:v:98:y:1983:i:2:p:291-310.
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    File URL: http://hdl.handle.net/10.2307/1885626
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    Citations

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    Cited by:

    1. Lence, Sergio H.(Sergio Horacio), 1988. "Transfer costs in agricultural trade: implications for empirical research," ISU General Staff Papers 1988010108000017599, Iowa State University, Department of Economics.
    2. Sudipta Sarangi & Hrachya Kyureghian, 2004. "Transport Cost Sharing and Spatial Competition," Discussion Papers of DIW Berlin 406, DIW Berlin, German Institute for Economic Research.
    3. Sudipta Sarangi & Hrachya Kyureghian, 2002. "Transport Cost Sharing," Departmental Working Papers 2002-08, Department of Economics, Louisiana State University.
    4. Sílvia Jorge & Cesaltina Pires, 2004. "Delivered versus Mill Nonlinear Pricing in Free Entry Markets," Working Papers de Economia (Economics Working Papers) 22, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
    5. Jorge, Sí­lvia Ferreira & Pires, Cesaltina Pacheco, 2008. "Delivered versus mill nonlinear pricing with endogenous market structure," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 829-845, May.
    6. George Norman & Jacques-François Thisse, 1998. "Should Pricing Policies be Regulated when Firms may Tacitly Collude?," Discussion Papers Series, Department of Economics, Tufts University 9803, Department of Economics, Tufts University.
    7. Gianni De Fraja & George Norman, 2004. "Product Differentiation and the Location of International Production," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(1), pages 151-170, March.
    8. Carlos Gutiérrez-Hita & Martin Peitz, 2001. "Retailer Locations, Local Supply And Price Policies," Working Papers. Serie AD 2001-26, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    9. repec:ags:aaea22:335481 is not listed on IDEAS
    10. George Norman & John Dunning, 1984. "Intra-industry foreign direct investment: Its rationale and trade effects," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 120(3), pages 522-540, September.
    11. George Norman, 1998. "Foreign Direct Investment and International Trade: a Review," Discussion Papers Series, Department of Economics, Tufts University 9810, Department of Economics, Tufts University.
    12. Koponen, Aki T., 2002. "Competition in Local Loan Markets. An Application of Linear City-Model with Price Discrimination," Discussion Papers 784, The Research Institute of the Finnish Economy.

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