Competitive Delivered Spatial Pricing

Lederer, Phillip
December 2003
Networks & Spatial Economics;Dec2003, Vol. 3 Issue 4, p421
Academic Journal
This paper contributes to the literature by studying price and production competition between spatially distributed profit maximizing firms. Firms compete by setting delivered prices, planning production, and sending output to each market. Both elastic demand and non-linear production costs are assumed. A non-cooperative game is defined, and its properties are characterized. We find spatial pricing patterns similar to those found by Hoover (1936). Existence and general properties of the Nash price and production equilibrium are shown and sufficient conditions that guarantee the existence of an unique price-production-transportation equilibrium are presented. A convergent algorithm is shown to find the equilibrium and is demonstrated with an example.


Related Articles

  • STRATEGIC MANAGEMENT OF E-COMMERCE: ISSUES AND CHALLENGES. Mamaghani, Farrokh // International Journal of Business Research;2013, Vol. 13 Issue 1, p31 

    This paper addresses several issues concerning e-commerce (EC) strategic management today. First, we will frame EC in a strategic management context where competitiveness, cost reduction, productivity, profitability and growth require that companies effectively implement EC strategies. Next, we...

  • A reply to A not on 'Price variation in spatial markets: the case of perfectly inelastic demand' Mulligan, Gordon R.; Fik, Timothy J. // Annals of Regional Science;Mar1991, Vol. 25 Issue 1, p63 

    Responds to K. Schloer's comments on the authors' article about price variations in spatial markets. Profit-maxmizing behavior of the firm; Elasticity of consumer demand; Types of market price behaviors; Determination of price equilibrium.

  • Workforce Downsizing. Gandolfi, Franco // Journal of Management Research (09725814);Apr-Jun2013, Vol. 13 Issue 2, p67 

    Workforce downsizing -- here referring to a systematic reduction of employee headcount -- is persistently utilized to increase organizational productivity, efficiency, profitability, and competitiveness. As a strategy of choice for firms around the world, workforce downsizing produces...

  • Dispersion equilibria in spatial Cournot competition. Benassi, Corrado // Annals of Regional Science;Mar2014, Vol. 52 Issue 2, p611 

    We consider the standard model of spatial Cournot competition and show that for dispersion equilibria to exist, (a) a necessary condition is that the distribution be not unimodal, and (b) a sufficient condition is that the distribution be convex with a unique antimode and that asymmetry is not...

  • LOCATION AND THE THEORY OF PRODUCTION. Moses, Leon N. // Quarterly Journal of Economics;May58, Vol. 72 Issue 2, p259 

    The article investigates the implications of factor substitution for the locational equilibrium of the firm. The author's purpose is to integrate the theory of location with the theory of production. He develops his theory through the simple case of a firm which employs two transportable inputs...

  • Outsourcing with long term contracts: capital structure and product market competition effects. Teixeira, João // Review of Quantitative Finance & Accounting;Feb2014, Vol. 42 Issue 2, p327 

    This paper analyzes how capital structure and product market competition affect the firms' strategic choice between outsourcing with long term contracts and outsourcing to the spot market. When outsourcing to the spot market firms are exposed to price uncertainty, whereas a long term contract...

  • Pricing Information Goods: A Strategic Analysis of the Selling and Pay-per-use Mechanisms. Balasubramanian, Sridhar; Bhattacharya, Shantanu; Krishnan, Viswanathan // INSEAD Working Papers Collection;2011, Issue 118, preceding p1 

    We analyze two pricing mechanisms for information goods - selling, where an up-front payment allows unrestricted use by the consumer, and pay per-use pricing where the payments are tailored to the consumer's usage patterns. We analytically model these pricing mechanisms in a market where...

  • The Bright Side of Loss Aversion in Dynamic and Competitive Markets. Kuksov, Dmitri; Kangkang Wang // Marketing Science;Sep/Oct2014, Vol. 33 Issue 5, p693 

    Awell-established phenomenon of consumer buying behavior is that consumers evaluate prices relative to a reference point and exhibit loss aversion; i.e., their propensity to buy is more negatively affected by prices above the reference point than it is positively affected by prices below the...

  • Developing Competitive Price and Production Postponement Strategies.  // Supply Chain Forum: International Journal;2010, Vol. 11 Issue 2, p46 

    No abstract available.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics