Skip to main content
SpringerLink
Log in

Transportation rates and plant location in oligopolistic competition with sequential entry

  • Published:
The Journal of Real Estate Finance and Economics Aims and scope Submit manuscript

Abstract

This paper examines the impact of quantity-discounted transportation rates on location patterns of oligopolistic competition with sequential entry. When transportation rates are constant, Hwang and Mai (1990) show that the entrant locates at the same point as the existing firms if the production function exhibits constant returns to scale. The entrant will locate farther away from (closer to) the market than the existing firms do if the production function exhibits increasing (decreasing) returns to scale. This paper shows that Hwang and Mai's results need not hold when transportation rates are a function of quantity shipped and distance traveled.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Moses, L.N. “Location and the Theory of Production,”Quarterly Journal of Economics 72 (1958), 259–272.

    Google Scholar 

  • Hwang, H. and C.C. Mai. “Sequential Entry and Plant Location in Oligopolistic Competition,”The Journal of Reed Estate Finance and Economics 3 (1990), 43–53.

    Google Scholar 

  • Fair, M.L. and E.W. Williams.Economics of Transportation and Logistics. Dallas: Business Publication. 1975.

    Google Scholar 

  • Miller, S.M. and D.M. Jensen. “Location and the Theory of Production: A Review, Summary and Critique of Recent Contributions,”Regional Science and Urban Economics 8 (1978), 117–128.

    Google Scholar 

  • Shieh, Y.N. and C.C. Mai. “Location and Theory of Production: Clarifications and Extensions,”Regional Science and Urban Economics 14 (1984), 199–218.

    Google Scholar 

  • Ferguson, C.E.The Neoclassical Theory of Production and Distribution. London: Cambridge University Press. 1969, pp. 169–186.

    Google Scholar 

  • Taylor, A.E. and W.R. Man.Advance Calculus, 3rd edition. New York: John Wiley and Sons. 1983, pp. 204–206.

    Google Scholar 

  • Takayama, A.Mathematical Economics, 2nd edition. Cambridge: Cambridge University Press.

  • Kusumoto, S.J. “On a Foundation of the Economic Theory of Location-Transport Distance vs. Technological Substitution,”Journal of Regional Science 24 (1984), 249–270.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, San Jose State University, 95192-0114, San Jose, CA

    Guang-Meei Doris Cheng & Yeung-Nan Shieh

Authors
  1. Guang-Meei Doris Cheng
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Yeung-Nan Shieh
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Cheng, GM.D., Shieh, YN. Transportation rates and plant location in oligopolistic competition with sequential entry. J Real Estate Finan Econ 11, 65–75 (1995). https://doi.org/10.1007/BF01097937

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF01097937

Key words

Search

Navigation