We analyze the equilibrium and the optimal resource allocations in a monocentric city undermonopolistic competition. Unlike the constant elasticity of substitution (CES) case, wherethe equilibrium markups are independent of the city size, we present a variable elasticity ofsubstitution (VES)...

This paper reviews the Hotelling literature of product differentiation. The purpose of this work is to examine the impact of the market structure on price competitionand equilibrium differentiation. The existence of a general ’principle of differentiation’ is rejected. In contrast,...

This paper extends the standard Hotelling model with quadratic transport costs to the multi-firm case. Considering locational equilibria we show that neither holds the Principle of Maximum Differentiation - as in the duopoly model - nor does the Principle of Minimum Differentiation - as in the...

Recent research has led to the empirical regularity that rm growth rate distributionsare heavy tailed. This nding implies that a few rms experience spectaculargrowth rates and decline, but that most rms have marginal growth rates. The literatureon high growth rms shows that high growth rms are...

We investigate the strategic impact of exible delivery frequencieson the competition of logistics service providers (LSPs) in a supplychain. LSPs compete for customers who choose an exclusive serviceprovider based on their individual preference, prices and inventorycosts. The service provider...

Despite the empirical relevance of advertising strategies in concentrated markets,the economics literature is largely silent on the effect of persuasive advertisingstrategies on pricing, market structure and increasing (or decreasing) dominance.In a simple model of persuasive advertising and...

We consider the plant location decision of a multinational, which has the option to invest in a more or aless technologically advanced country. We find that in the absence of exporting by the local firms, themultinational will invest in the country lagging behind, unless the firms in that...

An important discussion in recent years is the introduction of product patentsand the abolition of process patents. In a model with endogenous number of innovatingfirms, we show that whether product patent increases R&D is ambiguous, and depends onthe type of market demand and the cost of R&D....

This paper examines a three-stage model of divisionalization where, first, two parentfirms create independent units, second, the parent firms allocate cost reduction levelsover these units, and third, the resulting units compete in a Cournot market given theircurrent costs of production. The...

Over the last decade house prices increased remarkably in many countries. However, whilein several countries there was an employment boom in the construction sector, in others theshare of employment in this sector did not significantly change...