On the Existence of Spatial Monopolies Under Free Entry

This paper studies the question of entry in the circular city model when the pre-entry market structure involves local monopolies. In contrast with Salop (1979), we show that the unit profit rate of incumbent monopolists is strictly positive and bounded above. The upper bound decreases with the size of gaps and with the number of incumbents.

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Year of publication:	2001
Authors:	Zenou, Yves ; Steinmetz, Sebastien
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 4.2001, 8, p. 1-10
Publisher:	AccessEcon
Subject:	entry

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	D4 - Market Structure and Pricing ; L1 - Market Structure, Firm Strategy, and Market Performance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005416944