Interregional mixed duopoly

Tomohiro Inoue, Yoshio Kamijo, Yoshihiro Tomaru

Research output: Contribution to journalArticle

19 Citations (Scopus)

Abstract

We investigate an interregional mixed duopoly wherein a local public firm competes against a private firm. We employ a spatial model with price competition. The public firm is owned by the local government of the left half of the linear city called Region 1, and maximizes its welfare. We demonstrate that our two-stage game comprising location choice and price competition has two types of equilibria. In one equilibrium (E1), the local public firm locates in Region 1, and the private firm locates outside the region. In the other equilibrium (E2), both firms are located in Region 1. We find that although the two firms are closely located in E2, E2 payoff-dominates E1. Moreover, E2 is robust in the sense that the sequential choice of location adopts this equilibrium, regardless of whether the public firm is a leader or a follower.

Original languageEnglish
Pages (from-to)233-242
Number of pages10
JournalRegional Science and Urban Economics
Volume39
Issue number2
DOIs
Publication statusPublished - 2009 Mar

Keywords

  • Interregional mixed duopoly
  • Local public firm
  • Spatial model

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

Fingerprint Dive into the research topics of 'Interregional mixed duopoly'. Together they form a unique fingerprint.

Cite this