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The Effect of Distance Metric on the Degree of Spatial Competition between Firms

Author

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  • G Rushton

    (Department of Geography, University of Iowa, Iowa City, IA 52242, USA)

  • J-C Thill

    (Department of Geography, Catholic University of Louvain, 1348 Louvain-la-Neuve, Belgium)

Abstract

The proportion of a firm's market-area that is within a given, small, proportional difference in delivered-price between itself and its principal competitor, is an important measure of spatial competition. It is shown that for regular triangular and irregular spatial patterns of firms, areas of intense spatial competition are larger when transport costs are proportional to euclidean distances rather than to block distances, but this is not true for a regular square pattern. In an irregular pattern of firms, for each metric, the proportion of a firm's market-area in the area of intense spatial competition varies markedly from firm to firm. The locational and pricing behavior of firms is expected to be influenced by the size and locations of these areas of spatial competition.

Suggested Citation

  • G Rushton & J-C Thill, 1989. "The Effect of Distance Metric on the Degree of Spatial Competition between Firms," Environment and Planning A, , vol. 21(4), pages 499-507, April.
    • Handle: RePEc:sae:envira:v:21:y:1989:i:4:p:499-507
    DOI: 10.1068/a210499
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    References listed on IDEAS

    as
    1. Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521315647, November.
    2. Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521305525, November.
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    Cited by:

    1. Yongmei Lu & Jean-Claude Thill, 2008. "Cross-scale analysis of cluster correspondence using different operational neighborhoods," Journal of Geographical Systems, Springer, vol. 10(3), pages 241-261, September.
    2. Sabina Buczkowska & Nicolas Coulombel & Matthieu Lapparent, 2019. "A comparison of Euclidean Distance, Travel Times, and Network Distances in Location Choice Mixture Models," Networks and Spatial Economics, Springer, vol. 19(4), pages 1215-1248, December.
    3. Phipps Arabie, 1991. "Was euclid an unnecessarily sophisticated psychologist?," Psychometrika, Springer;The Psychometric Society, vol. 56(4), pages 567-587, December.

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