A Unified Model of Spatial Price Discrimination

Eleftheriou, Konstantinos and Michelacakis, Nickolas (2015): A Unified Model of Spatial Price Discrimination.

Abstract

We present a general model of mixed oligopoly, where competing firms exercise spatial price discrimination. Our findings indicate that the Nash equilibrium locations of firms are always socially optimal irrespective of the number of competitors, the level of privatization, the form of the transportation costs and the number and/or the varieties of the produced goods. An immediate implication of this result is that this form of competition is preferable from a welfare point of view.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mixed oligopoly; Social optimality; Spatial competition; Differentiated goods
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L32 - Public Enterprises ; Public-Private Enterprises; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R32 - Other Spatial Production and Pricing Analysis

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