Arbeitspapier

Regional Competition for the location of new facilities

A model of interregional competition for the location of new (production) facilities by a location decision maker (LDM) is analyzed as a differential game. Two regions try to enhance their attraction by making concessions to the LDM in order to raise the probability that a new facility will be located in a specific region, the benefit of which consists of the number of new jobs, new income etc. It is shown that the prospective benefits and costs of exerting influence are decisive for the final outcomes of the model. The open-loop Nash equilibrium solution -- which is also a degenerate feedback solution due to the simple structure of the model -- is likely to be inefficient in comparison with the cooperative solution of joint benefit maximization of both regions.

Language
Englisch

Bibliographic citation
Series: Volkswirtschaftliche Diskussionsbeiträge ; No. 75-99

Classification
Wirtschaft
Production Analysis and Firm Location: Government Policy
Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
Subject
Differential Game
Location Theory
Regional Competition

Event
Geistige Schöpfung
(who)
Christiaans, Thomas
Event
Veröffentlichung
(who)
Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht
(where)
Siegen
(when)
1999

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Christiaans, Thomas
  • Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht

Time of origin

  • 1999

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