Search Results - subject:"spatial contestability"

On the existence of spatial monopolies under free entry

STEINMETZ, Sébastien; ZENOU, Yves - Center for Operations Research and Econometrics (CORE), … - 1999

In a model of horizontal product differentiation, we show that local monopolies may exist under free entry when capital is perfectly mobile. In contrast both with the situation of restricted entry and with the zero-profit approach to free entry outcomes of Salop (1979), the unit profit rate of...

Persistent link: https://www.econbiz.de/10005042799

Product Variety and Welfare under Discriminatory and Mill Pricing Policies

Norman, George; Thisse, Jacques-François - C.E.P.R. Discussion Papers - 1994

incumbents but acts as a strong deterrent against entry. Product variety is determined by the degree of spatial contestability of … entry deterring effect of discriminatory pricing is dominant whatever the degree of spatial contestability or the nature of … demand but welfare effects depend upon the degree of spatial contestability. The lower the degree of spatial contestability …

Persistent link: https://www.econbiz.de/10005136598