英文摘要 |
We investigate the theory of spatial discrimination in a cross-street market and discuss two types of market competition-Bertrand and Cournot-with homogeneous goods and endogenous location choices. The result is that asymmetric dispersion, where one firm locates at the market center while the other firm locates in the interior, is the unique location equilibrium under Bertrand competition. Duopoly firms choose to agglomerate at the market center under Cournot competition. We also find that consumer surplus, industry profits, and social welfare are all higher under Cournot competition than under Bertrand competition. This implies that introducing a spatial barrier to competition generated through transportation costs may solve the problem of inconsistency from the conflicting interests among consumers, firms, and a social planner. |