Spatial Competition and Firms Location Decision under Cost Uncertainty, FEP Working Paper, n. 445, 2012

• Tipo: Trabalho Académico
• Data: 2012

Autores

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

Indexação

EBSCO

Classificação Científica

FOS: Ciências sociais > Economia e gestão

CORDIS: Ciências Sociais > Economia

Outras Informações

Abstract (EN): This paper considers a two-staged Location-Price game à la Hotelling, where firms first choose location and then set prices. A lack of information arises, because before choosing location firms are not sure about the marginal costs. However, they know the two possible outcomes in advance. We conclude that contrary to the perfect information case, firms may agglomerate, given that the difference between their possible marginal costs is sufficiently high for either firm. Also, we find that in most cases both firms are better off with imperfect information, which explains firms' incentives to develop cost reduction activities, such as R&D.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Notas: Disponível em http://www.fep.up.pt/investigacao/workingpapers/wp445.pdf