Do Firms Compete When Demand is Low? A Model of Spatial Differentiation

Chirco, Alessandra ; Lambertini, Luca (1994) Do Firms Compete When Demand is Low? A Model of Spatial Differentiation. Bologna: Dipartimento di Scienze economiche DSE, p. 8. DOI 10.6092/unibo/amsacta/5116. In: Quaderni - Working Paper DSE (210). ISSN 2282-6483.

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Abstract

In a spatial competition model, changes in firms’ competitive behaviour may occur when the hypothesis that individual gross surplus is positive in equilibrium is relaxed. We prove that there exists a region of the relevant parameter where firms’ behaviour mimics collusion, while in another range they find it optimal to isolate from each other and behave monopolistically.

Abstract

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Monografia (Working paper)

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