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Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination

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  • Eleftheriou, Konstantinos
  • Michelacakis, Nickolas

Abstract

We generalize Beladi et al. (2014) for any non-negative, increasing, continuous function of distance as transportation costs function. By doing so, we show that in a duopoly, partial privatization does not change the socially optimal character of the Nash equilibrium location. Our results call for further research on testing their robustness under the existence of more than two competing firms.

Suggested Citation

  • Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2015. "Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination," MPRA Paper 63893, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63893
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    References listed on IDEAS

    as
    1. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991. "Mixed oligopoly with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 43-53, March.
    2. Braid, Ralph M., 2008. "Spatial price discrimination and the locations of firms with different product selections or product varieties," Economics Letters, Elsevier, vol. 98(3), pages 342-347, March.
    3. A. P. Lerner & H. W. Singer, 1937. "Some Notes on Duopoly and Spatial Competition," Journal of Political Economy, University of Chicago Press, vol. 45(2), pages 145-145.
    4. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2014. "A public firm in a model of spatial duopoly with price discrimination," Economics Letters, Elsevier, vol. 123(1), pages 79-81.
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    More about this item

    Keywords

    Privatization; Spatial competition; Transportation costs;
    All these keywords.

    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
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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