Loughborough University
Leicestershire, UK
LE11 3TU
+44 (0)1509 263171
Loughborough University

Loughborough University Institutional Repository

Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/4262

Title: Why should a firm choose to limit the size of its market area?
Authors: Alderighi, Marco
Piga, Claudio
Keywords: Monopolistic competition
Transport costs
Endogenous fixed costs
Overlapping market areas
Issue Date: 2007
Publisher: © Loughborough University
Series/Report no.: Loughborough University. Department of Economics. Discussion Paper Series;WP 2007 - 21
Abstract: We study when a monopolistically-competitive firm may optimally choose to limit the size of its market. This may be the case when the cost of serving the market with geographically dispersed customers is increasing in size. We also investigate the incentives faced by a firm to limit the reach of its market, when it adopts different pricing schemes. We show that under certain assumptions the derived equilibria are constrained socially optimal.
Description: This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2007_21.html. This paper was also published as: Alderighi, Marco & Piga, Claudio A., 2008. "Why should a firm choose to limit the size of its market area?," Regional Science and Urban Economics, Elsevier, vol. 38(2), pp. 191-201.
Version: Published
URI: https://dspace.lboro.ac.uk/2134/4262
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

Files associated with this item:

File Description SizeFormat
Alderighi-Piga-2007_21.pdf269.02 kBAdobe PDFView/Open

 

SFX Query

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.