Cournot and Bertrand in shipping models with circular markets
We investigate two shipping (delivered pricing) duopoly models with circular markets, Cournot and Bertrand. In the Cournot model, maximal distance between two firms becomes the unique equilibrium outcome if transport cost is increasing with distance, irrespective of whether the transport cost function is convex or concave. This result is robust in the sense that cost heterogeneity between two firms does not change the result. In contrast to the Cournot model, this location pattern can fail to be an equilibrium in the Bertrand model. Copyright (c) 2006 the author(s). Journal compilation (c) 2006 RSAI.
Year of publication: |
2006
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Authors: | Matsumura, Toshihiro ; Shimizu, Daisuke |
Published in: |
Papers in Regional Science. - Wiley Blackwell. - Vol. 85.2006, 4, p. 585-598
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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