Abstract.
In contrast to most of the literature on a circular market in which firms choose to disperse equally from each other in equilibrium, this research note shows that the equal-distance dispersion in a circular market results from the substitutability of products produced by two single-plant duopoly firms. Meanwhile, agglomeration at one point results from complementarity. In the multi-plant duopoly case, we find - in contrast to Chamorro-Rivas (2000) - that when firms sell complements, the equilibrium locations tend to exhibit both inter-firm agglomeration and intra-firm dispersion. In other words, the location layout in equilibrium exhibits spatial agglomeration (by pairs) finitely at many points.
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Received: 8 February 2002, Accepted: 28 October 2002,
JEL Classification:
D43, L13
We would like to thank Chien-Fu Chou, De-**ng Guan, Jacques Poot, and three anonymous referees for their valuable comments. Responsibility for any remaining errors rests with the authors.
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Yu, CM., Lai, FC. Cournot competition in spatial markets: Some further results. Papers Reg. Sci. 82, 569–580 (2003). https://doi.org/10.1007/s10110-003-0154-2
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DOI: https://doi.org/10.1007/s10110-003-0154-2