Cost inefficiency and Optimal Market Structure in Spatial Cournot Discrimination, FEP Working Paper, n. 462. 2012

• Type: Academic Work
• Date: 2012

Authors

Ricardo Biscaia (Author) FEP; Paula Sarmento (Author) FEP

Indexing

EBSCO

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Other information

Abstract (EN): This paper analyzes the location patterns of firms in Cournot spatial discrimination set- ting. The innovation step is that firms are allowed to have di¤erent marginal costs of the production. When analyzing the two-stage location-quantity game, we conclude that firms choose the central agglomeration outcome whatever the marginal cost di¤erence between them. When maximizing social welfare, the social planner chooses the central location for both firms as well if the marginal cost di¤erences are not too big. When allowed to decide if the ine¢ cient firm should be in the market or not, the social planner removes the ine¢ cient firm from the market if its cost is too high.

Language: English

Type (Professor's evaluation): Scientific

Notes: Disponível em http://wps.fep.up.pt/wps/wp462.pdf