Outcomes of voting and planning: Condorcet,Weber and Rawls locations

The paper is concerned with the comparison of the locations of a facility resulting from voting and planning procedures. It is shown that a voting location exists and coincides with that minimizing the total distance covered by the users to go to the facility when the transportation network contains no cycles. For a general network, least upper bounds on the ratio of the social values of the voting and planning locations are given in the cases where the total or the maximal travelled distance is minimized.     

New Economic Geography: An appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economic Sciences

Paul Krugman has clarified the microeconomic underpinnings of both spatial economic agglomerations and regional imbalances at national and international levels. He has achieved this with a series of remarkably original papers and books that succeed in combining imperfect competition, increasing returns, and transportation costs in new and powerful ways. Yet, not everything was brand new in New Economic Geography. To be precise, several disparate pieces of high-quality work were available in urban economics and location theory. Our purpose in this paper is to shed new light on economic geography through the lenses of these two fields of economics and regional science.     

Nonlinear pricing in spatial oligopoly

A model of duopoly competition in nonlinear pricing when firms are imperfectly informed about consumer locations is analyzed. A continuum of consumers purchase a variable amount of a product from one of two firms located at the endpoints of the market. At the Nash equilibrium in quantity-outlay schedules, consumers buy the same quantities as they would from the same firm if it were a monopolist facing the same informational asymmetries, but they receive greater surplus. Hence, no efficiency gains result from competition. If consumers have the option to reveal their locations and have the firms deliver the goods, all consumers choose to reveal their locations in equilibrium. Thus, the inefficiencies from information asymmetries may not arise because firms can deliver the good to consumers. In contrast, with a monopoly seller, consumers have no incentives to reveal their locations.     

Pricing,distribution and the supply of storage

The Belgian nitrogen fertilizer cartel announces each year a price schedule which is enforced during the coming twelve months. These prices are resale prices to final users and reflect changes in costs of storage. A game-theoretic model is set up to rationalize this behavior for the case of instantaneous final demands and a large number of distributors. Habit formation in final demand is then shown to lead to even more flexible prices, while transferability over time is seen to favor more rigid prices. It is finally suggested that vertical integration into a competitive distribution sector can be profitable because it restores the possibility of intertemporal price discrimination.     

On existence and stability of spatial equilibria and steady-states

This note discusses the existence and stability of two equilibrium concepts for a spatial economy in which the utility of an agent depends on the overall distribution of agents over space.