This article studies competition in markets with transport costs and capacity constraints. We compare the outcomes of price competition and coordination in a theoretical model and find that when firms compete, they more often serve more distant customers who are closer to the competitor's plant....

We study competition in markets with significant transport costs and capacity constraints. We compare the cases of price competition and coordination in a theoretical model and find that when firms compete, they more often serve more distant customers that are closer to plants of competitors. By...

I begin by fitting traditional gravity equations to document that regional flows in the Brazilian cement industry exhibit gravity-like structure, with cement trade decaying sharply in distance traveled. I then show that this large distance effect owes to firms' strategic behavior over and above...