Spatial competition under uniform delivered pricing

Detalhes bibliográficos
Autor(a) principal: Pontes, José Pedro
Data de Publicação: 1987
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/25816
Resumo: A Hotelling-type model of spatial competition is considered, in which two firms compete in uniform delivered prices. First, it is shown that there exists no uniform delivered price–location equilibrium when the product sold by the firms is perfectly homogeneous and when consumers buy from the firm quoting the lower delivered price. Second, when the product is heterogeneous and when preferences are identically, independently Weibull-distributed with standard deviation μ, we prove that there exists a single uniform delivered price–location equilibrium if μ≧1/8 times the transportation rate times the size of the market. In equilibrium, firms are located at the center of the market and charge the same uniform delivered price, which equals their average transportation cost, plus a mark-up of 2μ. Finally, we discuss how our result extends to the case of n firms and proceed to a comparison of equilibria under uniform mill and delivered pricing.
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spelling Spatial competition under uniform delivered pricingSpatial CompetitionFirms LocationTransport CostsA Hotelling-type model of spatial competition is considered, in which two firms compete in uniform delivered prices. First, it is shown that there exists no uniform delivered price–location equilibrium when the product sold by the firms is perfectly homogeneous and when consumers buy from the firm quoting the lower delivered price. Second, when the product is heterogeneous and when preferences are identically, independently Weibull-distributed with standard deviation μ, we prove that there exists a single uniform delivered price–location equilibrium if μ≧1/8 times the transportation rate times the size of the market. In equilibrium, firms are located at the center of the market and charge the same uniform delivered price, which equals their average transportation cost, plus a mark-up of 2μ. Finally, we discuss how our result extends to the case of n firms and proceed to a comparison of equilibria under uniform mill and delivered pricing.ElsevierRepositório da Universidade de LisboaPontes, José Pedro2022-10-28T08:12:31Z19871987-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/25816engPontes, José Pedro .(1987). "Spatial competition under uniform delivered pricing". Regional Science and Urban Economics. Volume 17, No 3, pp. 441-449info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:55:20Zoai:www.repository.utl.pt:10400.5/25816Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:09:34.256576Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Spatial competition under uniform delivered pricing
title Spatial competition under uniform delivered pricing
spellingShingle Spatial competition under uniform delivered pricing
Pontes, José Pedro
Spatial Competition
Firms Location
Transport Costs
title_short Spatial competition under uniform delivered pricing
title_full Spatial competition under uniform delivered pricing
title_fullStr Spatial competition under uniform delivered pricing
title_full_unstemmed Spatial competition under uniform delivered pricing
title_sort Spatial competition under uniform delivered pricing
author Pontes, José Pedro
author_facet Pontes, José Pedro
author_role author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Pontes, José Pedro
dc.subject.por.fl_str_mv Spatial Competition
Firms Location
Transport Costs
topic Spatial Competition
Firms Location
Transport Costs
description A Hotelling-type model of spatial competition is considered, in which two firms compete in uniform delivered prices. First, it is shown that there exists no uniform delivered price–location equilibrium when the product sold by the firms is perfectly homogeneous and when consumers buy from the firm quoting the lower delivered price. Second, when the product is heterogeneous and when preferences are identically, independently Weibull-distributed with standard deviation μ, we prove that there exists a single uniform delivered price–location equilibrium if μ≧1/8 times the transportation rate times the size of the market. In equilibrium, firms are located at the center of the market and charge the same uniform delivered price, which equals their average transportation cost, plus a mark-up of 2μ. Finally, we discuss how our result extends to the case of n firms and proceed to a comparison of equilibria under uniform mill and delivered pricing.
publishDate 1987
dc.date.none.fl_str_mv 1987
1987-01-01T00:00:00Z
2022-10-28T08:12:31Z
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status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/25816
url http://hdl.handle.net/10400.5/25816
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Pontes, José Pedro .(1987). "Spatial competition under uniform delivered pricing". Regional Science and Urban Economics. Volume 17, No 3, pp. 441-449
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dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
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