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Nonprofit Firms in a Linear City with Nonnegative Profits

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  • Christopher Hoag
  • Kamal Lamsal

Abstract

In a linear city model of firm location, firms have altruistic objective functions that consist of a linear combination of maximizing profits and producing output, although firms are constrained to earn nonnegative profits. If firms place sufficient weight on maximizing profits, then firms locate at the ends of the linear city, just as in the firm location game under profit maximization. If firms place sufficient weight on producing output, then firms will locate at the median of the linear city, just as in the candidate voting game.

Suggested Citation

  • Christopher Hoag & Kamal Lamsal, 2014. "Nonprofit Firms in a Linear City with Nonnegative Profits," Working Papers 1403, Trinity College, Department of Economics.
    • Handle: RePEc:tri:wpaper:1403
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    File URL: http://www3.trincoll.edu/repec/WorkingPapers2014/WP14-03.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
    1. Deneffe, Daniel & Masson, Robert T., 2002. "What do not-for-profit hospitals maximize?," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 461-492, April.
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    4. Richard G. Frank & David S. Salkever, 1991. "The Supply of Charity Services by Nonprofit Hospitals: Motives and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 430-445, Autumn.
    5. Dranove, David, 1988. "Pricing by non-profit institutions : The case of hospital cost-shifting," Journal of Health Economics, Elsevier, vol. 7(1), pages 47-57, March.
    6. Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
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    More about this item

    Keywords

    Nonprofit; Linear City;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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