The paper studies indirect network effects in a market composed by two incompatible intermediaries that choose price (short-term issue) in addition to location (long-term issue). The paper first shows that (i) when the network externality is sufficiently weak, only maximum differentiation...

When facilities are built to serve end consumers directly, it is natural that consumer demands are affected by the number of open facilities. Moreover, sometimes a facility becomes more attractive if other facilities around it are built. To capture these factors, in this study we construct a...

With the growing recognition of the role played by geography in all sorts of economic problems, there is strong interest in measuring the size and scope of local spillovers (i.e., simple anonymous agglomeration or congestion effects, or more complicated interactions between individuals or firms...

A great deal of multinationals receive a bundle of hidden or cash subsidizes upon investing in a foreign country. Policymakers often argue that a subsidy today will help locate friends of the investor later on. Using extensive data on FDI investments, we analyze such patterns. In particular, we...

With the growing recognition of the role played by geography in all sorts of economic problems, there is strong interest in measuring the size and scope of local spillovers (i.e., simple anonymous agglomeration or congestion effects, or more complicated interactions between individuals or firms...

In this paper we study a duopoly where the network effect is nonmonotone and the network can be overloaded. The firms choose prices and locations endogenously, and the agent's utility is influenced by the number of people patronizing the same firm she does. We determine the market equilibrium,...