This paper presents a location–price equilibrium problem on a tree. A sufficient condition for having a Nash equilibrium in a spatial competition model that incorporates price, transport, and externality costs is given. This condition implies both competitors are located at the same point, a vertex that is the unique median of the tree. However, this is not an equilibrium necessary condition. S...

The spokes model is a recent framework to study n-firms spatial competition. In a spatial framework firms delivering their product can price discriminate with respect to consumers’ location. Conditions for the existence of a price-location equilibrium of the spokes model with delivered product are established in both the case where there are as many firms as spokes and in the case not all spoke...

This paper formulates and analyzes a relatively simple model of duopoly pricing under conditions of fluctuating demand. Price-setting firms produce a homogenous product subject to increasing marginal cost of production. We focus on static Nash equilibria in price choices and examine the impact of varying the level of demand on equilibrium price levels, markups of price over marginal cost, and p...

We describe competition over space between a competitive shipping industry (truck-barge) and one with market power (the railroad). The latter prices so as to "beat the competition" in equilibrium, or else at the monopoly price, if that is lower. The monopoly price rises more slowly than do the costs of transportation (freight absorption) if the spatial demand at each point is log-concave. With ...

Many attribute the rise in obesity since the early 1980s to the overconsumption of fast food. A dynamic model of a differentiated-product industry equilibrium shows that a firm with market power will price below marginal cost in a steady-state equilibrium. A spatial hedonic pricing model is used to test whether fast food firms set prices in order to exploit their inherent addictiveness. The res...

In this paper, we present spatial price equilibrium network models, both static and adaptive, with differentiated products under perfect quality information for producers and consumers and under quality information asymmetry with consumer learning of product quality with a time delay. The adaptive model with information asymmetry is able to adapt to the uncertainty in consumer learning as well ...

The second of this series of two papers is devoted to a theoretical analysis of spatial interaction between commodity markets. The theoretical framework that we present is referred to as the stochastic spatial arbitrage model (SSAM); it accounts for most of the empirical regularities observed in the first paper. Two basic mechanisms are found to be responsible for spatial inter-market interacti...