Why should a firm choose to limit the size of its market area?

被引:1
作者
Alderighi, Marco [1 ,2 ]
Piga, Claudio A. [3 ]
机构
[1] Univ Aosta, Aosta, Italy
[2] Univ Bocconi, CERTeT, Milan, Italy
[3] Univ Loughborough, Dept Econ, Loughborough, Leics, England
关键词
monopolistic competition; transport costs; endogenous fixed costs; overlapping market areas;
D O I
10.1016/j.regsciurbeco.2008.01.002
中图分类号
F [经济];
学科分类号
02 ;
摘要
We study when a monopolistically-competitive firm may optimally choose to limit the size of its market. This may be the case when the cost of serving the market with geographically dispersed customers is increasing in size. We also investigate the incentives faced by a firm to limit the reach of its market when it adopts two different pricing schemes. We show that under certain assumptions the derived equilibria are constrained socially optimal. (C) 2008 Elsevier B.V. All rights reserved.
引用
收藏
页码:191 / 201
页数:11
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