14 documents found, page 1 of 2

Exogenous regional productivity asymmetries in a core-periphery model [Comunica...

We study how regional asymmetries in firms’ productivity affect the spatial distribution of economic activity and social welfare. We introduce an exogenous regional asymmetry in the two-region quasi-linear log utility footloose entrepreneur model to explore how the regional framework alone can affect firms’ productivity that would otherwise be homogeneous across regions. We find that the agglomeration of entrep...

Public–private collusion

We study collusion between a public firm and a private firm facing linear demand and quadratic costs. We characterize the collusive outcome that results from Nash bargaining and compare it to the non-cooperative outcome. If the public firm’s taste for consumer surplus is mild, both firms reduce output (as in a private duopoly). If it is intermediate, while the public firm reduces output, the private firm expand...

Economic geography meets Hotelling: the home-sweet-home effect

We introduce heterogeneous preferences for location in 2-region core-periphery models, thereby generating an additional dispersive force: the home-sweet-home effect. Different forms of heterogeneity in preferences for location induce different long-run spatial distributions of economic activity, depending on the short-run equilibrium model and the distribution of preferences for location that are considered. Ou...

The footloose entrepreneur model with a finite number of equidistant regions

We study the Footloose Entrepreneur model with a finite number of equidistant regions, focusing on the analysis of stability of agglomeration, total dispersion, and boundary dispersion. As the number of regions increases, there is more tendency for agglomeration and less tendency for dispersion. As it tends to infinity, agglomeration always becomes stable while dispersion always becomes unstable. These results ...

Economic geography meets hotelling: a home-sweet-home effect

We propose a 2-region core-periphery model where all agents are inter-regionally mobile and have Hotelling-type heterogeneous preferences for location. The utility penalty from residing in a location that is not the preferred one generates the only dispersive force of the model: the home-sweet-home effect. Different distributions of preferences for location induce different spatial distributions in the long-run...

Welfare-improving mixed collusion

We study collusion between a public firm and a private firm, focusing on the impact of the public firm’s preference for consumer surplus. We characterize the collusive outcome (market shares, profits, consumer surplus and welfare) that results from Nash bargaining between the two firms, compare it with the competitive outcome, and study sustainability of collusion. If the public firm’s preference for consumer s...

Horizontal mergers between multisided platforms: insights from Cournot competition

This paper discusses the literature on horizontal mergers between multisided platforms and argues that the Cournot model can provide useful insights into the welfare effects of such mergers. To illustrate those insights, we develop a simple model in which two-sided platforms offer a homogeneous service and compete à la Cournot, and derive the effects of “average-marginal-cost-preserving” mergers on consumers on...

Collusion in mixed oligopolies and the coordinated effects of privatization

We study the sustainability of collusion in mixed oligopolies where private and public firms only differ in their objective: private firms maximize profits, while public firms maximize total surplus. If marginal costs are increasing, public firms do not supply the entire market, leaving room for private firms to produce and possibly cooperate by restricting output. The presence of public firms makes collusion a...

Agglomeration patterns in a multi-regional economy without income effects

We study the long-run spatial distribution of industry using a multi-region core–periphery model with quasi-linear log utility Pflüger (Reg Sci Urban Econ 34:565–573, 2004). We show that a distribution in which industry is evenly dispersed among some of the regions, while the other regions have no industry, cannot be stable. A spatial distribution where industry is evenly distributed among all regions except on...

Economic geography meets Hotelling: a home-sweet-home effect