PRODUCT DIFFERENTIATION, PRICING POLICY AND EQUILIBRIUM*

Journal of Regional Science - Tập 33 Số 3 - Trang 343-363 - 1993
Gianni De Fraja1, George Norman2
1Department of Economics, University of York, York YO1 5DD, England
2Department of Economics, University of Edinburgh, 50 George Square, Edinburgh EH8 9JY, United Kingdom

Tóm tắt

ABSTRACT. This paper studies the price‐location equilibrium of duopolists supplying differentiated goods and competing in a spatial market with elastic demand. We show that a price‐location equilibrium exists under all three pricing policies traditionally considered by the literature: f.o.b. mill, uniform delivered, and spatially discriminatory pricing. We also show that firms always cluster at the market center. The second part of the paper studies the endogenous choice of pricing policy. A surprising feature of the resulting equilibrium is asymmetry. The greater the extent to which the goods are substitutes, the more likely is it that one firm will choose f.o.b. pricing and the other price discrimination. Finally, the welfare consequences of the analysis show some interesting trade‐offs.

Từ khóa


Tài liệu tham khảo

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Thông tin
Thông tin xuất bản

Journal of Regional Science

Tập 33 Số 3

343-363

Thông tin tác giả