A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
A note on “Price variation in spatial markets: the case of perfectly inelastic demand”
Summary These considerations are based on the need for consistent models. If we look at the spatial oligopoly approach of Mulligan and Fik from this point of view, we draw two conclusions. First, their model does not indicate any reasons for asymmetrical conjectural or actual price reactions in the market, as they are not influenced by any different marginal production costs and different locational distributions. Second, exactly one conjectural reaction coefficient is consistent with the profit-maximizing behavior of the firms, and this coefficient is identical for all firms in the market. Consequently, the alternative market results for different reaction coefficients in the paper of Mulligan and Fik are reduced toone result atconsistent conjectural reaction coefficients.
A note on “Price variation in spatial markets: the case of perfectly inelastic demand”
Summary These considerations are based on the need for consistent models. If we look at the spatial oligopoly approach of Mulligan and Fik from this point of view, we draw two conclusions. First, their model does not indicate any reasons for asymmetrical conjectural or actual price reactions in the market, as they are not influenced by any different marginal production costs and different locational distributions. Second, exactly one conjectural reaction coefficient is consistent with the profit-maximizing behavior of the firms, and this coefficient is identical for all firms in the market. Consequently, the alternative market results for different reaction coefficients in the paper of Mulligan and Fik are reduced toone result atconsistent conjectural reaction coefficients.
A note on “Price variation in spatial markets: the case of perfectly inelastic demand”
Schöler, Klaus (author)
1991
Article (Journal)
English
Price variation in spatial markets: the case of perfectly inelastic demand
| Online Contents | 1989
A reply to a note on ‘Price variation in spatial markets: the case of perfectly inelastic demand’
| Online Contents | 1991
Consumers in Perfectly Competitive Markets
| Wiley | 2023
Interaction in Perfectly Competitive Markets
| Wiley | 2023
Producers in Perfectly Competitive Markets
| Wiley | 2023