Agglomeration in a vertically-related oligopoly
This paper examines the location of three vertically-linked firms. In a spatial economy composed of two regions, a monopolist firm supplies an input to two consumer goods firms that compete in quantities. It is concluded that agglom- eration is more likely to occur when the ratio between the transpo...
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| Format: | article |
| Language: | eng |
| Published: |
2018
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10400.5/15513 |
| Country: | Portugal |
| Oai: | oai:www.repository.utl.pt:10400.5/15513 |
| Summary: | This paper examines the location of three vertically-linked firms. In a spatial economy composed of two regions, a monopolist firm supplies an input to two consumer goods firms that compete in quantities. It is concluded that agglom- eration is more likely to occur when the ratio between the transport cost of the intermediate good and the transport cost of the final good is higher. If this pro- portion is low, the likelihood of an agglomeration decreases with transport costs. If the ratio has an intermediate value, a non-monotonic pattern is obtained that is different from Krugman and Venables (1995). |
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