Spatial Oligopolies with Uniform Delivered Pricing
Space allows firms to implement a large variety of price policies, depending on the way transportation costs are passed on to customers. Somewhat surprisingly, the bulk of the work on spatial price theory has been focused on the study of mill pricing (see Gabszewicz and Thisse, 1986, for a recent survey). It is probable that the main reason for this emphasis lies in the close connection between spatial competition with mill prices and the model of product differentiation à la Hotelling-Lancaster (see, for example, Eaton and Lipsey, 1989, for further details).
KeywordsTransportation Cost Location Equilibrium Mixed Strategy Price Equilibrium Pure Strategy
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