Competition by choice: the effect of consumer search on firm location decisions.
Firms that cluster attract consumers by facilitating price comparison, but clustering also increases the intensity of local competition. A location-search game where firms produce at the same constant marginal cost and consumers have identical demand functions was developed to study the tension bet...
| Publicado en: | American Economic Review Vol. 80; pp. 1092 - 1105 |
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| Autor principal: | |
| Formato: | Artículo |
| Publicado: |
American Economic Association
December 1990
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| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | Firms that cluster attract consumers by facilitating price comparison, but clustering also increases the intensity of local competition. A location-search game where firms produce at the same constant marginal cost and consumers have identical demand functions was developed to study the tension between these two incentives. The results show that under reasonable conditions, the only equilibrium outcome involves firms choosing head-on competition by locating together. |
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