Competitive Pricing for a Spatial Industry *

Spatial Price Discrimination in Two‐Dimensional Competitive Markets

“…If the market area is smaller, no monopolistic area occurs. In this case, only the second double integral of Equation (7) applies, and the model is reduced to Gee's pure competitive approach (Gee, 1985). Employing (5), the second part of (6) is equivalent to the condition of nonnegative demand.…”

“…There is a widespread literature on spatially discriminatory pricing, in the case of a spatial monopolist (see Beckmann, 1976;or Schöler, 1983, for example) as well as for the case of competitive markets (see Greenhut and Ohta, 1975;Thisse and Vives, 1988;Schöler, 1995). With the exception of a contribution by Gee (1985), all authors consider linear market areas. As will be shown in this paper, the consideration of two-dimensional competitive market areas leads to intuitively surprising results in comparison with the nondiscriminatory millpricing policy.…”

“…Even though this is the only kind of discriminatory pricing that is compatible with the assumptions of profit-maximizing firms under free entry, the Hooverian competitive pricing rule has been criticized by some authors (see e.g., Greenhut, Norman, and Hung, 1987). Gee (1985), in contrast, provides an exhaustive theoretical foundation for the Hooverian pricing schedule. Following this discussion, Gee formulated a two-dimensional model that, by assumption, is restricted to parameter values excluding the discontinuous price structure introduced by Hoover.…”

Heterogeneous Space in Regional Economics and Beyond

“…paper which showed 'in conformance to classical homogeneous landscape assumptions' that a strict f.o.b. mill price system could, itself, be derived from a spatially discriminating price system, and we propose consideration of d'Aspremont et al (1983),Coyte et al (1989),Eaton and Lipsey (1978),Norman (1981),Norman and Nichols (1982),Gee (1985),Lederer and Hurter (1986),Macleod et al (1988),Thisse and Vives (1988) on factors yielding spatial price differentials.…”

Choice of Product Type by Strategically Interdependent Firms

“…(See the Appendix for details.) The Bertrand spatial pricing strategy was put forward by Hoover (1937) and 'rediscovered' and developed in various contexts by Gee and Lambert (1972), and Gee (1976Gee ( , 1985Gee ( , 1990. MacLeod, Norman and Thisse (1988) showed in a formal game theoretic context that the strategy is the optimal non cooperative price strategy for a fixed demand spatial industry.…”