Spatial Cournot Competition in a Linear City with Directional Delivery Constraints

Abstract

This study investigates a sequential game of location and transportation mode choices, as well as the subsequent quantity choice. The results show that spatial Cournot competition with directional delivery constraints yields a richer set of spatial configurations, involving midpoint agglomeration, maximum differentiation and asymmetric dispersion, and a richer set of transportation mode selections, involving delivery in different directions, asymmetric delivery between duopoly firms, and delivery in two directions by each firm, depending on the fixed cost of a transportation instrument. This paper concludes with an investigation of welfare analysis on optimal locations and transportation modes.

Spatial Cournot competition in a circular city with more than two dispatches

“…The work of Sun () is the first to add directional delivery constraints in a circular‐city Cournot model, meaning that a firm transports products in only one direction in a spatial market, in order to analyse firms’ location competition . In contrast, Sun () adds directional delivery constraints in a linear‐city Cournot model to show that a richer set of spatial configurations and transportation mode selections arise in equilibrium.…”