Abstract
Imperfect competition has been an important branch of economic theory, at least since Cournot’s (1838) model of duopoly. A more recent development is spatial competition, which serves as a foundation for models of imperfect competition. The concept of space as the groundwork for imperfect competition provides many useful insights into price determination and resource allocation. Our goal is to illustrate these insights. In pursuing this track, we ignore many traditional issues in location theory including issues revolving around the shape of market ares. We also bypass questions about the existence of equilibrium in spatial models, which are discussed along with many of the locational issues in a recent lengthy survey by Gabszewicz and Thisse (1984).
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Capozza, D.R., Van Order, R. (2018). Spatial Competition. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1685
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DOI: https://doi.org/10.1057/978-1-349-95189-5_1685
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