Benefit from the advantage of externalities, urban agglomerations are playing more and more important roles in regional economic development. However, present literature failed to distinguish the differences between urban agglomerations' pecuniary externality and technology externality. In this...

We characterize mixed-strategy equilibria in a setting with capacity constrained suppliers which can charge location based prices to different customers. The equilibrium prices weakly increase in the transport distance between supplier and customer, whereas the margins decrease. Despite prices...