We empirically test implications from location theory using the location of Los Angeles-area gasoline stations in physical space and in the space of product attributes. We consider the effect of demand patterns, entry costs, and several proxies for competition on the tendency for a gasoline station to be physically located more or less closely to its competitors. Using an estimation procedure that controls for spatial autocorrelation and spatial autoregression, and controlling for market characteristics and nonspatial product attributes, we find considerable evidence that firms locate their stations in an attempt to spatially differentiate their product as market competition increases.

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Over 20 recent antitrust cases have turned on whether competition in complex durable‐equipment markets prevents manufacturers from exercising market power over proprietary aftermarket products and services. We show that the price in the aftermarket will exceed marginal cost despite competition in the equipment market. Absent perfectly contingent long‐term contracts, firms will balance the advantages of marginal‐cost pricing to future generations of consumers against the payoff from monopoly pricing for current, locked‐in equipment owners. The result holds for undifferentiated Bertrand competition, differentiated duopoly, and monopoly equipment markets. We also examine the effects of market growth and equipment durability.

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The authors attempt a comprehensive assessment of different forms of international integration on growth. In particular, the paper considers the impact of trade flows, of inward foreign direct investment, of preferential treatment of less-developed countries, and of membership in trade blocs. Results confirm that general openness and foreign direct investment into a country do lead to increased growth; that membership in a trade bloc facilitates growth; and that the variation in income in the trade bloc also encourages more rapid growth among member countries.