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Mixed duopoly under hotelling with convex production costs

Author

Listed:
  • John S. Heywood

    (University of Wisconsin-Milwaukee)

  • Dongyang Li

    (Renmin University of China)

  • Guangliang Ye

    (Hainan University)

Abstract

Dragone and Lambertini (Reg Sci Urban Econ 84:103568, 2020) show that in a Hotelling duopoly with linear transport cost, sufficiently convex production cost generates an elevated price equilibrium with collocation at the middle. We examine the consequences of a mixed duopoly under these cost assumptions. No equilibrium exists in a mixed duopoly with simultaneous location. Equilibria exist under location leadership. Private firm leadership generates greater welfare than public firm leadership, a result different from previous examinations. A mixed duopoly with a foreign firm generates an equilibrium with firms usually located apart but with the public firm serving all interior customers. This typically increases welfare relative to the fully private market.

Suggested Citation

  • John S. Heywood & Dongyang Li & Guangliang Ye, 2022. "Mixed duopoly under hotelling with convex production costs," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 487-510, October.
    • Handle: RePEc:spr:anresc:v:69:y:2022:i:2:d:10.1007_s00168-022-01144-8
    DOI: 10.1007/s00168-022-01144-8
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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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