On spatial competition with quadratic transport costs and one online firm

Colombo, Stefano; Hou, Zemin

doi:10.1007/s00168-019-00934-x

Ann Reg Sci

2019

DOI: 10.1007/s00168-019-00934-x

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On spatial competition with quadratic transport costs and one online firm

Stefano Colombo

Zemin Hou

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Cited by 3 publications

(2 citation statements)

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“… 4 As is common in the literature that considers the competition between traditional retailers and location-irrelevant retailers (Balasubramanian, 1998 , Bouckaert, 2000 , Nakayama, 2009 , Colombo and Hou, 2019 , Colombo and Matsushima, 2020 , Guo and Lai, 2014 and 2017 ), we consider only one location-irrelevant (online) retailer. Indeed, several online retailers could generate price undercutting and zero profits.…”

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Location-Price Equilibria when Traditional Retailers Compete Against an Online Retailer

Colombo

Hou

2021

Rev Ind Organ

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We consider a location-then-price game where two traditional retailers compete with a location-irrelevant online retailer. We characterize the existing equilibria, and we show that in any possible equilibrium there is direct competition between the traditional retailers. Furthermore, the traditional retailers locate at neither a maximal nor minimal distance. In equilibrium, the price of the online retailer might be higher or lower than the price of the traditional retailers, depending on the relative competitiveness of the online retailer and the traditional retailers.

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“… 5 Colombo and Hou ( 2019 ) show the impossibility to characterize the location-then-price equilibrium in the case of quadratic transportation costs. See also Guo and Lai ( 2014 ).…”

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Location-Price Equilibria when Traditional Retailers Compete Against an Online Retailer

Colombo

Hou

2021

Rev Ind Organ

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Urban/rural spatial price discrimination with online competition

Guo,

Lai

2024

Ann Reg Sci

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We contribute to the previous offline spatial price discrimination by adding an online entrant that results in partially equalized prices, and the urban (rural) segments are served by the offline (online) firms. Online competition induces the offline firms to move closer to the market center, which causes the equilibrium locations to no longer be the social optimum due to the online price distortion. The greater the online advantage is, the higher the online price, the less dispersed the offline locations, and the lower the offline prices will be in urban areas. Finally, zoning policies and two extensions of online price discrimination and multiple offline firms with free entry are offered.

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Transportation gas emissions with online retailing: a spatial model

Hou

Colombo

2022

Spatial Economic Analysis

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On spatial competition with quadratic transport costs and one online firm

Cited by 3 publications

References 12 publications

Location-Price Equilibria when Traditional Retailers Compete Against an Online Retailer

Location-Price Equilibria when Traditional Retailers Compete Against an Online Retailer

Urban/rural spatial price discrimination with online competition

Transportation gas emissions with online retailing: a spatial model

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