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Spatial competition and consumer exclusion: social welfare perspectives in central-place system

Letters in Spatial and Resource Sciences volume 3, pages 101–110 (2010)Cite this article

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Abstract

The condition of unutilized space has been excluded from the existing framework of central-place theory, while there are several cases where spatial structures are not entirely fulfilled and certain empty areas are identified. First, it is shown that this scenario can be found when a producer is involved in extremely high level of assembly transportation cost or in enormous size of market area. In this case, producers tend to pursue their cost minimization behavior than that of revenue maximization, which allows the presence of spatial consumer exclusion. Secondly, it is argued that the existence of unutilized area attracts potential new entrants to join the market competition, which may have benefit of reduction or elimination of the problem of consumer exclusion. Together with this alternative spatial formation approach, the analysis further attempts to evaluate the impact of decision-making of producers on welfare level of consumers.

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Authors and Affiliations

  1. Instituto de Economía Aplicada Regional (IDEAR), Departamento de Economía, Universidad Católica del Norte, Avenida Angamos, 0610, Antofagasta, Chile

    Daisuke Nakamura

  2. Regional Economics Applications Laboratory (REAL), University of Illinois, 607 S. Mathews, #318, Urbana, IL, 61801, USA

    Daisuke Nakamura

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  1. Daisuke Nakamura
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Correspondence to Daisuke Nakamura.

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Nakamura, D. Spatial competition and consumer exclusion: social welfare perspectives in central-place system. Lett Spat Resour Sci 3, 101–110 (2010). https://doi.org/10.1007/s12076-010-0041-9

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  • DOI: https://doi.org/10.1007/s12076-010-0041-9

Keywords

  • Spatial competition
  • Market areas
  • Social welfare
  • Industrial location policy

JEL Classification

  • D43
  • L13
  • Q56
  • R38