Strategic Accessibility Competition

Arbeitspapier

We analyze the effect of competition in market-accessibility enhancement among quality-differentiated firms. Firms are located in regions with different ex-ante transport costs to reach the final market. We characterize the equilibrium of the two-stage game in which firms first invest to improve market accessibility and then compete in prices. Efforts in accessibility improvement crucially depend on the interplay between the willingness to pay for the quality premium of the median consumer and the ex-ante difference in accessibility between regions. From the social standpoint, all the accessibility investment should be carried out by the high-quality firm. Finally quality choice is endogenized.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 696

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning ; Industry Studies: Transportation and Utilities: General

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bacchiega, Emanuele ; Randon, Emanuela ; Zirulia, Lorenzo
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 2010

Further information

• DOI: doi:10.6092/unibo/amsacta/4545
• Handle: http://hdl.handle.net/10419/159537
• Last update: 10.03.2025, 11:41 AM CET