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Author: | Madden, P. |
Title: | Geographical separation of oligopolists can be very competitive |
Journal: | European Economic Review
2006 : OCT, VOL. 50:7, p. 1709-1728 |
Index terms: | competitiveness oligopoly product differentiation models |
Freeterms: | homogenous products geographical separation |
Language: | eng |
Abstract: | This paper provides a new explanation for the geographical agglomeration of very similar oligopolistic firms, reverse of the Hotelling model. The paper shows that geographical separation of product differentiated oligopolists across two market-places can lead to fierce price competition, analogous to that of homogenous product Bertrand models, if consumer access costs are homogeneous and products are sufficiently good substitutes. |
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