Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination

Eleftheriou, Konstantinos and Michelacakis, Nickolas (2015): Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination.

Abstract

We generalize Beladi et al. (2014) for any non-negative, increasing, continuous function of distance as transportation costs function. By doing so, we show that in a duopoly, partial privatization does not change the socially optimal character of the Nash equilibrium location. Our results call for further research on testing their robustness under the existence of more than two competing firms.

• Item Type: MPRA Paper
• Language: English
• Keywords: Privatization; Spatial competition; Transportation costs
• 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; 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

References

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Lerner, A., and Singer, H. (1937) Some notes on duopoly and spatial competition. Journal of Political Economy 45(2), 145-186.