A Model Of Competitive Delivered Spatial Pricing
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Author | : Phillip J. Lederer |
Publisher | : |
Total Pages | : |
Release | : 1998 |
Genre | : |
ISBN | : |
This paper studies price and production competition between spatially distributed firms. Firms compete by choosing delivered prices, a pricing regime which is often observed for goods with high transportation costs. The model is a very general one: customers have price elastic demand and firms have increasing marginal production and transportation costs. To study this competitive situation, a non-cooperative game is proposed. Existence and general properties of the Nash price and production equilibrium are shown and sufficient conditions that guarantee the existence of a unique price-production-transportation equilibrium are presented. It is shown that the only pricing patterns that can result from equilibrium are basing point, monopoly or mill pricing. A convergent algorithm is shown and demonstrated with an example.
Author | : Melvin L. Greenhut |
Publisher | : Durham, N.C. : Duke University Press |
Total Pages | : 284 |
Release | : 1975 |
Genre | : Business & Economics |
ISBN | : |
Author | : Phillip J. Lederer |
Publisher | : |
Total Pages | : 20 |
Release | : 1992 |
Genre | : |
ISBN | : |
Author | : Marc E. McDill |
Publisher | : |
Total Pages | : 54 |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : George Norman |
Publisher | : Taylor & Francis |
Total Pages | : 190 |
Release | : 1986 |
Genre | : Business & Economics |
ISBN | : 9780850861211 |
Author | : Louis Phlips |
Publisher | : |
Total Pages | : 68 |
Release | : 1976 |
Genre | : Competition |
ISBN | : |
Author | : Melvin L. Greenhut |
Publisher | : |
Total Pages | : 262 |
Release | : 1975 |
Genre | : Competition |
ISBN | : |
Author | : Paul Spencer Plummer |
Publisher | : |
Total Pages | : 602 |
Release | : 1993 |
Genre | : |
ISBN | : |
Author | : Mark Robert Fratrik |
Publisher | : |
Total Pages | : 129 |
Release | : 1981 |
Genre | : Price discrimination |
ISBN | : |
Author | : Alberto Iozzi |
Publisher | : |
Total Pages | : 0 |
Release | : 2003 |
Genre | : |
ISBN | : |
This paper studies a spatial duopoly under uniform delivered pricing when firms do not ration the supply of the good, thus extending to a spatial context the analysis of oligopolistic markets with no rationing. The paper shows the existence of the equilibrium in prices under different tie-breaking rules (TBR) and compare the features of the equilibria found under these rules, thereby allowing to highlight the importance of the choice of the TBR in studying these models. When consumers buy from the nearest firm in case of equal prices (efficient TBR), any symmetric price pair within a given range is a Nash equilibrium, with each firm serving exactly half of the market line. If demand in each local market is equally split between the firms charging the same price (random TBR), the only equilibrium price is the one that gives zero profits to each firm. The degree of competitiveness of the market crucially depends on the TBR. Under the efficient TBR, all (but one) price equilibria deliver positive profits to both firms. Under the random TBR, the market outcome is very competitive in that firms make zero profits. None of the equilibria found under any tie-breaking rule are allocatively efficient.