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題名 Hotelling was right with decreasing returns to scale and a coalition-proof refinement
作者 Sun, C.-H.;Lai, Fu-Chuan
賴孚權
貢獻者 財政系
關鍵詞 agglomeration; competition (economics); market conditions; modeling; price dynamics; production cost; returns to scale; spatial analysis
日期 2013-06
上傳時間 28-May-2015 17:39:34 (UTC+8)
摘要 This paper provides a simple, realistic, and very slightly modified version of the production technology in Hotelling`s (Econ J 39:41-57, 1929) spatial model with linear transportation costs to overcome the nonexistence problem of equilibrium-decreasing returns to scale. It is shown that a pure strategy Nash equilibrium in price competition always exists for all location pairs and guarantees uniqueness if we utilize a coalition-proof refinement introduced by Bernheim et al. (J Econ Theory 42:1-12, 1987). Decreasing returns to scale reduce the profit a firm can capture through price undercutting and stabilize the price equilibrium due to the increasing average production cost of firms. As a consequence, duopoly firms agglomerating at the center of a line are shown to be at the unique location equilibrium. This paper confers a new validity to the so-called principle of minimum differentiation, in some sense, with the least deviation from the original Hotelling (Econ J 39:41-57, 1929) model. © 2012 Springer-Verlag.
關聯 Annals of Regional Science, 50(3), 953-971
資料類型 article
DOI http://dx.doi.org/10.1007/s00168-012-0528-y
dc.contributor 財政系
dc.creator (作者) Sun, C.-H.;Lai, Fu-Chuan
dc.creator (作者) 賴孚權zh_TW
dc.date (日期) 2013-06
dc.date.accessioned 28-May-2015 17:39:34 (UTC+8)-
dc.date.available 28-May-2015 17:39:34 (UTC+8)-
dc.date.issued (上傳時間) 28-May-2015 17:39:34 (UTC+8)-
dc.identifier.uri (URI) http://nccur.lib.nccu.edu.tw/handle/140.119/75356-
dc.description.abstract (摘要) This paper provides a simple, realistic, and very slightly modified version of the production technology in Hotelling`s (Econ J 39:41-57, 1929) spatial model with linear transportation costs to overcome the nonexistence problem of equilibrium-decreasing returns to scale. It is shown that a pure strategy Nash equilibrium in price competition always exists for all location pairs and guarantees uniqueness if we utilize a coalition-proof refinement introduced by Bernheim et al. (J Econ Theory 42:1-12, 1987). Decreasing returns to scale reduce the profit a firm can capture through price undercutting and stabilize the price equilibrium due to the increasing average production cost of firms. As a consequence, duopoly firms agglomerating at the center of a line are shown to be at the unique location equilibrium. This paper confers a new validity to the so-called principle of minimum differentiation, in some sense, with the least deviation from the original Hotelling (Econ J 39:41-57, 1929) model. © 2012 Springer-Verlag.
dc.format.extent 255797 bytes-
dc.format.mimetype application/pdf-
dc.relation (關聯) Annals of Regional Science, 50(3), 953-971
dc.subject (關鍵詞) agglomeration; competition (economics); market conditions; modeling; price dynamics; production cost; returns to scale; spatial analysis
dc.title (題名) Hotelling was right with decreasing returns to scale and a coalition-proof refinement
dc.type (資料類型) articleen
dc.identifier.doi (DOI) 10.1007/s00168-012-0528-y
dc.doi.uri (DOI) http://dx.doi.org/10.1007/s00168-012-0528-y