Price discrimination and the location choice of a durable goods monopoly

Delivered pricing by a spatial monopoly amounts to third degree price discrimination. Well known results in spatial economics show that the monopolist location choice is efficient under delivered pricing and generally inefficient under mill pricing. By contrast, the present paper shows that if the monopolist sells a durable good, the location is also inefficient under delivered pricing. (C) 2002 Elsevier Science B.V. All rights reserved.