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Models of Spatial Competition: a Critical Review

Author

Listed:
  • Ricardo Biscaia

    (CIPES and Faculdade de Economia, Universidade do Porto)

  • Isabel Mota

    (CEF.UP and Faculdade de Economia, Universidade do Porto)

Abstract

This critical review focuses on the development of spatial competition models in which the location choice by firms plays a major role. Therefore, after a brief review of the roots of spatial competition modeling, this paper intends to offer a critical analysis over its recent developments. The starting point is the recognition of the increased importance of this topic through the quantification of the research in this field by using some bibliometric tools. After that, this study proceeds by identifying the main research paths within spatial competition modeling. Specifically, the type of strategy (Bertrand vs. Cournot competition) and its implications over location equilibria are discussed. Additionally, it is presented a comparison of the effects on the location equilibria of the most typical assumptions in literature, that respect to the market (linear vs. circular), production costs, transportation costs, as well as the number of firms. Finally, the type of information (complete vs. incomplete) and its effects over the equilibria are also discussed.

Suggested Citation

  • Ricardo Biscaia & Isabel Mota, 2011. "Models of Spatial Competition: a Critical Review," FEP Working Papers 411, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:411
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    spatial competition; review; Hotelling; game theory;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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