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The Annals of Regional Science

, Volume 36, Issue 4, pp 645–661 | Cite as

Regional competition for the location of new facilities

  • Thomas Christiaans

Abstract.

A model of interregional competition for the location of new facilities is analyzed as a differential game. Two regions try to enhance their attraction by making concessions to a location decision maker in order to raise the probability that a new facility will be located in a specific region. The prospective benefits and costs of exerting influence are decisive for the final outcomes of the model. The open-loop (and feedback) Nash equilibrium solution is inefficient in comparison to the cooperative solution of joint benefit maximization of both regions.

JEL classification: R38 C73 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Thomas Christiaans
    • 1
  1. 1.Department of Economics, University of Siegen, D-57068 Siegen, Germany (e-mail: christiaans@vwl.wiwi.uni-siegen.de)DE

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