Equilibrium number of firms and economic welfare in a spatial price discrimination model |
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| Authors: | Toshihiro Matsumura Makoto Okamura |
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| Institution: | aInstitute of Social Science, University of Tokyo, 7-3-1, Hongo, Bunkyo-ku, Tokyo 113-0033, Japan;bEconomics Department, Hiroshima University, Japan |
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| Abstract: | We examine welfare implications of the equilibrium number of entering firms in a spatial price discrimination model. In contrast to Salop Salop, S., 1979. Monopolistic competition with outside goods. Bell Journal of Economics 10, 141–156.], the equilibrium number of firms can be either excessive or insufficient from the normative viewpoint. |
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| Keywords: | Circular-city model Excess entry theorem Anti-excess entry theorem Delivered pricing |
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