Does Cournot Competition Necessarily Yield Spatial Agglomeration
نویسندگان
چکیده
Recent work suggests that Cournot oligopolists competing in a spatial model, with a uniform distribution of consumers, agglomerate in the center of the market. In this paper we analyze the robustness of this result with a general symmetric distribution of consumers and show that if the population density is "too thin" at the center of the market, then Cournot competition does not yield spatial agglomeration. Central agglomeration will result if the population is sufficiently dense at any point in the distribution. An example with two spatially separated markets further examines a case where this condition is not satisfied and we show that for any arbitrary number of firms, Cournot competition will never yield central agglomeration. Notably, the model explains spatial dispersion with perfectly overlapping markets.
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