Cournot Competition, Market Size Effects and Agglomeration

Arbeitspapier

We analyse a two-stage location-quantity game with many firms and two regions. We show that the firms will never agglomerate in the same location if transportation is costly between the regions. We also analyse the effects of differences in market size and economic integration on the allocation of industrial activity. For high levels of trade costs firms locate in different regions. Lowering the trade costs beyond a critical level triggers an agglomeration of industry in the larger region. This process of agglomeration is gradual in nature and trade costs have to be successively lowered for a full-scale agglomeration to take place.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2005:23

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Oligopoly and Other Imperfect Markets ; Real Estate Markets, Spatial Production Analysis, and Firm Location: General
• Subject: agglomeration ; cross-hauling ; market size effects ; spatial Cournot competition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gallo, Fredrik
• Event: Veröffentlichung
• (who): Lund University, School of Economics and Management, Department of Economics
• (where): Lund
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/259908
• Last update: 10.03.2025, 11:44 AM CET