1991/11/01 by Simon P. Anderson, Damien J. Neven, Damien Neven · 2 citations
Economics, Econometrics and Finance · Business, Management and Accounting · #Merger and Competition Analysis #Consumer Market Behavior and Pricing #Digital Platforms and Economics
paper · doi:10.2307/2527034
Most theoretical models of spatial competition show a strong tendency toward spatial dispersion of firms, yet common observations suggest that firms tend to agglomerate. In this paper, the authors show that competition between Cournot-type oligopolists that discriminate over space leads to spatial agglomeration. One implication is that firms do not (necessarily) earn supernormal profits at the free-entry equilibrium. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.