Do Firms Compete When Demand is Low? A Model of Spatial Differentiation

In a spatial competition model, changes in firms' competitive behaviour may occur when the hypothesis that individual gross surplus is positive in equilibrium is relaxed. We prove that there exists a region of the relevant parameter where firms' behaviour mimics collusion, while in another range they find it optimal to isolate from each other and behave monopolistically.

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Year of publication:	1994
Authors:	Chirco, Alessandra ; Lambertini, Luca
Publisher:	Bologna : Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)

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Series:	Quaderni - Working Paper DSE ; 210
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.6092/unibo/amsacta/5116 [DOI] hdl:10419/159053 [Handle] RePEc:bol:bodewp:210 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10011651079