haku: @all futures / yhteensä: 174
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| Tekijä: | Gehrig, T. |
| Otsikko: | Competing markets |
| Lehti: | European Economic Review
1998 : FEB, VOL. 42:2, p. 277-310 |
| Asiasana: | COMPETITION MARKETS EXTERNALITIES GLOBALIZATION TRANSACTION COSTS |
| Kieli: | eng |
| Tiivistelmä: | In a model of two-dimensional spatial competition the notion of competition btw. market places is analyzed. While one of the dimensions can be interpreted as geographical distance, the other one is some product characteristics (like maturity of a futures contract). Initially single product firms select a specific location and variety and later, at a second stage, they compete in prices. Agglomeration economies arise endogenously due to savings in transportation costs for consumers. It is demonstrated that entrants might prefer to settle in existing markets rather than setting up their business somewhere in between. In particular, the emergence of new market places is less likely as transportation costs decline. Despite the forces towards agglomeration, multiple markets will arise under free entry of firms once markets are large enough. |
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