Chirco, Alessandra ; Lambertini, Luca
(1994)
Do firms compete when demand is low? A Model of Spatial Differentiation.
DOI 10.6092/unibo/amsacta/807.
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Official URL: http://www.dse.unibo.it/wp/210.pdf
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