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National oligopolies and economic geography

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  • Barbara Annicchiarico
  • Federica Orioli
  • Federico Trionfetti

Abstract

We replace monopolistic competition with national oligopolies in a model of "new economic geography". There are many possible bifurcation diagrams but, unlike in monopolistic competition, the symmetric equilibrium is always stable for low trade costs. The antitrust policy, though identical in both countries, affects the geographical distribution of firms. In turn, migration attenuates the effectiveness of the antitrust policy in eliminating collusive behavior. For high trade costs a toughening of the antitrust policy is likely to result in more agglomeration and may reduce world welfare. The antitrust policy is more likely to be welfare improving when market integration progresses.
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Suggested Citation

  • Barbara Annicchiarico & Federica Orioli & Federico Trionfetti, 2012. "National oligopolies and economic geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 71-99, February.
    • Handle: RePEc:spr:anresc:v:48:y:2012:i:1:p:71-99
    DOI: 10.1007/s00168-010-0414-4
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    Cited by:

    1. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.

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    More about this item

    Keywords

    R12; R13; F12;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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