Optimal Zoning in Spatial Differentiation
Abstract: This study analyzes optimal zoning policy in a duopolistic spatial competition framework for both circular and linear spaces. A regulator is introduced in the third stage of the price-location game through a welfare function to model zoning preferences from firms and consumers. An equilibr...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2017 |
| País: | Chile |
| Institución: | CONICYT Chile |
| Repositorio: | SciELO Chile |
| OAI Identifier: | oai:scielo:S0718-52862017000100033 |
| Acceso en línea: | http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862017000100033 |
| Access Level: | acceso abierto |
| Palabra clave: | Zoning spatial competition welfare function equilibrium results industrial policy. |
| Sumario: | Abstract: This study analyzes optimal zoning policy in a duopolistic spatial competition framework for both circular and linear spaces. A regulator is introduced in the third stage of the price-location game through a welfare function to model zoning preferences from firms and consumers. An equilibrium outcome is then found for both spatial configurations. When the regulator is inclined to favor consumers (consumer-oriented) both firms are restricted to locate at one point to serve the whole market. Nevertheless, when the preferences of the regulator are biased towards firms (firm-oriented) the zoning area is maximized, with both firms being located at the market boundaries. The equilibrium outcome confirms location patterns found in real life situations under a non-neutral regulator. |
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