Spatial price discrimination in a symmetric barbell model: Bertrand vs. Cournot

This paper investigates the theory of spatial discrimination for general demands and general transportation costs in a barbell model, where markets' locations are assumed to be at opposite endpoints of a line. Duopoly firms in the Bertrand model always differentiate maximally, whereas in the Cournot model the market demand structure is not so critical, but the functional form of the transportation cost plays a crucial role in determining equilibrium location. Non‐maximal distance appears in the Cournot equilibrium when a convex transportation cost is allowed, bringing about the findings that the equilibrium consumer surplus may be higher and the equilibrium profits may be lower under Cournot competition than under Bertrand competition.     

Price‐sensitive demand and market entry

This paper revisits the optimal entry decision in a differentiated product market where customer demand is price‐sensitive and depends on a per‐unit transport cost. We show that compared to the socially optimal outcome, too few firms may enter when entry costs and transport costs are high.     

An application of the Beckmann-Ingene argument to a monopsonist's spatial pricing problem

The purpose of this note is to show that an analogue of the Beckmann-Ingene proposition on price policies of a spatial monopolist applies to a properly formulated profit maximization problem for a spatial monopsonist. The proof of this fact uses the same linear transformation employed in the Beckmann-Ingene argument. Received: 15 October 1998 / Accepted: 9 January 1999     

Price regulation in a spatial duopoly with possible non-buyers

If the price is regulated in a spatial duopoly where consumers have a finite upper bound as to the price they are willing to pay for the differentiated product, in most cases the Principle of Minimum Differentiation does not apply. Depending on the market structure firms either (i) form local monopolies, or (ii) differentiate intermediately, or (iii) agglomerate at the market centre. Minimum differentiation is never total-surplus-maximizing nor desired by firms. In most cases the regulator sets a price below that maximizing industry profits. For a substantial range of market configurations the regulated (first-best) price exceeds marginal cost. This induces firms to serve a larger part of the market. Received: February 1999/Accepted: September 2001     

Non‐linearities in regional growth: A non‐parametric approach

This paper analyses the determinants of regional economic growth in the European Union adopting a non‐parametric approach. Although the local‐linear kernel estimator applied does not explicitly take into account the spatial dimension of the data, it is found to be consistent in our context. In addition, the geographically weighted regression turns out to be less efficient. We obtain evidence of a non‐linear relationship between regional growth and its determinants in the form of parameter heterogeneity and threshold effects. These non‐linearities mainly affect the initial productivity of labour, the human capital endowment and, as a novelty, the level of infrastructures.     

Potential merger‐forcing entry reduces maximum spacing between firms in spatial competition

In the literature, the range of market sizes (spacings between firms) consistent with free‐entry equilibrium, in various models of spatial competition, extends from the zero‐profit market size, up to the market size for which ‘sophisticated entry’ halfway between two existing firms, by an entrant that correctly foresees post‐entry prices, is marginally deterred. I argue that the upper limit might be the (significantly smaller) market size for which ‘merger‐forcing entry’ by an entrant right next to an existing firm, causing severe price competition and inducing a horizontal merger between the entrant and the existing firm, is marginally deterred.     

Location choice under delivered pricing: a reinterpretation

This article reinterprets, under a common framework, previous results on location choice under delivered pricing. The paper clearly identifies the economic forces which explain why the socially optimal locations are an equilibrium of the location-price game in some models, and why they are not an equilibrium in other models. The paper shows that the rationale behind Hamilton et al. (Reg Sci Urban Econ 19:87–102, 1989) and Gupta’s (Reg Sci Urban Econ 24:265–272, 1994) non-optimality results are very different. While the first result is explained by the social inefficiency of the price game, the second one is due to the existence of a strategic effect. The author is grateful to the three anonymous referees for their valuable comments.     

Determinants of self‐employment among commuters and non‐commuters

We analyse the determinants of self‐employment and focus on the contextual environment. By distinguishing between commuters and non‐commuters we are able to analyse the influence from the work and home environment, respectively. Our results indicate a significant difference between non‐commuters and commuters in terms of the role of networks for becoming self‐employed. Our results indicate that it is the business networks where people work, rather than where they live that exerts a positive influence on the probability of becoming self‐employed. These effects are further robust over educational and occupational categories.     

R&D competition in a spatial model with technical risk*

Abstract. In this paper, we introduce stochastic R&D into a Hotelling model with two duopolists. With an emphasis on the interaction between firms' R&D decision and location choice, we compare socially and privately optimal locations and levels of R&D. We show that, depending on R&D cost and the degree of technical risk, equilibrium location varies from minimum differentiation to maximum differentiation. From a welfare perspective, the equilibrium distance between the two firms could be either closer, farther or socially best. Moreover, depending on cost structure, firms' R&D expenditures could be either higher, lower or socially optimal, from a welfare viewpoint.     

Search costs decrease prices in a model of spatial competition

This paper examines the Nash equilibrium prices of stores in a spatial search model. By assumption, a large store is certain to have the particular product a consumer wants, whereas a small store has it with probability w. Large and small stores alternate with each other on a circular roadway. Consumers must search by visiting stores. In the Nash price equilibrium, large stores charge higher prices than small stores. Perhaps surprisingly, all Nash equilibrium prices are lower than in the corresponding perfect‐information‐no‐search model (for a given value w). This last result is also demonstrated in a model with only small stores.     

Optimal licensing with equity

The existing literature for an insider patentee indicates that the optimal licensing contract is royalty licensing under Bertrand competition. This paper explores licensing by means of royalty licensing and equity licensing in a Hotelling linear city model. Given a covered market, this paper shows that the insider patentee would like to choose equity licensing when the transport rate relative to the innovation size is large, while selecting royalty licensing otherwise. Next, provided that the market is uncovered post licensing, this paper finds that equity and fixed‐fee licensing are indifferent to the patentee and are both superior to royalty licensing.     

Peak factors of non‐Gaussian wind forces on a complex‐shaped tall building

This paper focuses on the development of peak factor formulas of non‐Gaussian wind pressure processes after reviewing the current estimation methods of non‐Gaussian peak factors. A skewness‐dependent peak factor is proposed by accounting for the contribution of skewness and kurtosis parameters in some existing Hermite moment‐based formulas. The possible correction on the upcrossing rate used in the translation process approach is also investigated. Wind tunnel pressure data on a practical 43‐story building with unusual shape is used to validate the accuracy of the skewness‐dependent peak factor by investigating various statistical properties of wind‐induced fluctuating pressure field on the complex‐shaped tall building example. Copyright © 2012 John Wiley & Sons, Ltd.     

The determinants of location choice: Single plants versus multi‐plants*

This paper adopts a count data model to explore the distinction between single plant and multi‐plant location choices. It is hypothesized that start‐up location decisions would be determined by supply variables (land, labour and capital costs, workforce and technological characteristics); demand variables (market size and market accessibility) and agglomeration economies. We use plant data and focus on location choices within Portuguese municipalities. Our research shows that new multi‐plants are particularly sensitive to urbanization economies, land costs and the size of the local market, while new single plants are more responsive to labour costs, both localization and urbanization economies and accessibility to main markets.     

Residential water demand analysis of a Low‐Income Rate Assistance Program in California,United States

This paper presents a statistical analysis of residential water demand in a Low‐Income Rate Assistance (LIRA) Program. A comparison of 10 years of monthly household level water use data (2002–2011) for LIRA versus non‐LIRA customers revealed significant differences in water use patterns in four of the five study cities. In addition, seasonal index (averages summer versus winter water use) were investigated for LIRA versus non‐LIRA. There was a statistically significant difference for some cities; however, the level of difference was not large enough to conclusively demonstrate an outstanding difference between the two groups. Finally, the peaking factor approach coupled with the statistical modelling of demand elaborated in this paper will provide a more realistic way of representing residential water demand variations in system performance assessment/evaluations.     

The size distribution of exporting and non‐exporting firms in a panel of Chinese provinces

This paper studies the size distribution of exporting and non‐exporting firms in a panel of Chinese provinces. The power law exponents of exporting firms are significantly less than those of non‐exporting firms. The average power law exponents fell from 0.74 in 1998 to 0.64 in 2007 for exporting firms, and from 1.03 in 1998 to 0.83 in 2007 for non‐exporting firms. Further analysis showed that credit constraints have a significant negative effect on the exponents of the size distribution of exporting firms, suggesting that smaller firms are more credit‐constrained than larger firms.     

Testing a polynomial relationship of the non‐parametric component in partially linear spatial autoregressive models*

A statistical test procedure is proposed to check a polynomial relationship of the non‐parametric component in partially linear spatial autoregressive models, in which a residual‐based bootstrap procedure is used to derive the p‐value of the test. Some simulations are conducted to assess the performance of the test and the results show that the bootstrap approximation to the null distribution of the test statistic is valid and the test is powerful in identifying a polynomial relationship of the non‐parametric component. Furthermore, a real‐world example is given to demonstrate the usefulness of the proposed test.     

Climate change impacts on streamflow and non‐point source pollutant loads in the 3S Rivers of the Mekong Basin

Changes in non‐point source (NPS) pollutants are of particular concern in developing countries. This study investigated the responses of streamflow and NPS pollutant loads to climate change in the 3S River Basin, a trans‐boundary basin of the Mekong River, using Soil and Water Assessment Tool (SWAT). Firstly, the SWAT model in simulations of streamflow and NPS pollutant loads was calibrated and validated against observed data to prove the reliability of the simulation results. Then, the calibrated SWAT model was used to simulate changes in streamflow and NPS pollutants under the impact of climate change. The simulation results indicated that the streamflow and NPS pollutant loads are predicted to increase in the future. Moreover, water shortage in the dry season and soil degradation in the wet season are emphasized to occur in the future.     

Who with whom: Co‐operation activities in a cluster region

This study examines the effect of establishment and cluster characteristics on different co‐operation partners in one particular region. Based on a survey in the Nuremberg region in Germany, we estimate a multivariate probit model and confirm other studies, in particular regarding co‐operation with R&D institutions. Establishments in the service sector are especially likely to co‐operate with local initiatives and networks, a type of co‐operation that functional cluster affiliation has no effect on. Co‐operation with local authorities is of interest only if establishments are affiliated with a cluster that is of importance to regional policy. Establishments that consider themselves cluster members are particularly likely to co‐operate.