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Spatial oligopoly as a noncooperative game

Abstract

Equilibrium in spatial markets has been studied as a problem of monopolistic competition. The typical assumption is that firms charge mill prices and believe that other firms either keep prices constant or preserve their market areas. In this paper somewhat different assumptions are made. First, a system of delivered or c.i.f. prices is assumed. A second model considers different production costs. A third model examines the case of more than two firms, but only for the special case where all firms are spaced at equal distance. Throughout this paper it is assumed that collusion is illegal, the game is a noncooperative one.

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References

  1. Beckmann, M.: Location Theory, Random House, New York, 1968.

  2. —: Spatial Oligopoly Revisited: An Examination of Some Strategies in Mill Pricing in One and Two-Dimensional Markets, Papers and Proceedings, Regional Science Association, 17, 1972.

  3. Lovell, M. C.: Product Differentiation and Market Structure, Western Economic Journal, 1970.

  4. Mills, E., andM. R. Lav.: A Model of Market Areas with Free Entry, Journal of Political Economy,73, 278–288, 1964.

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Beckmann, M.J. Spatial oligopoly as a noncooperative game. Int J Game Theory 2, 263–268 (1973). https://doi.org/10.1007/BF01737575

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Keywords

  • Production Cost
  • Economic Theory
  • Game Theory
  • Equal Distance
  • Market Area