Optimal zoning in spatial differentiation

Artikel

This study analyzes optimal zoning policy in a duopolistic spatial competition framework for both circular and linear spaces. A regulator is introduced in the third stage of the price-location game through a welfare function to model zoning preferences from firms and consumers. An equilibrium outcome is then found for both spatial configurations. When the regulator is inclined to favor consumers (consumer-oriented) both firms are restricted to locate at one point to serve the whole market. Nevertheless, when the preferences of the regulator are biased towards firms (firm-oriented) the zoning area is maximized, with both firms being located at the market boundaries. The equilibrium outcome confirms location patterns found in real life situations under a non-neutral regulator.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Estudios de Economía ; ISSN: 0718-5286 ; Volume: 44 ; Year: 2017 ; Issue: 1 ; Pages: 33-51 ; Santiago de Chile: Universidad de Chile, Departamento de Economía

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Market Design ; Welfare Economics: General ; Economics of Regulation ; Oligopoly and Other Imperfect Markets
• Subject: Zoning ; spatial competition ; welfare function ; equilibrium results ; industrial policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hamoudi, Hamid ; Rodríguez, Isabel ; Martín-Bustamante, Marcos Sanz
• Event: Veröffentlichung
• (who): Universidad de Chile, Departamento de Economía
• (where): Santiago de Chile
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/194249
• Last update: 10.03.2025, 11:44 AM CET