Spatial Price Discrimination, Competition and Locational Effects

Greenhut, John G.; Greenhut, Melvin L.

doi:10.2307/2553798

Cited by 136 publications

(62 citation statements)

References 7 publications

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“…In most cases, the antecedents of the underlying analytic and empirical work can be traced to the early work in regional science and location theory (Weber, 1909;Lösch, 1940;Hotelling, 1929;Greenhut and Greenhut, 1975;Isard, 1956). As noted in Krugman (1991), difficulties in modeling increasing returns to scale was one of the main reasons for the marginalization of geographical factors in mainstream economic analysis.…”

Section: Background and Motivationmentioning

confidence: 99%

Agglomeration economies and productivity in Indian industry

Lall¹,

Shalizi

Deichmann

2004

Journal of Development Economics

197

147

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The primary objective of this paper is to examine the extent to which agglomeration economies contribute to economic productivity. We distinguish three sources of agglomeration economies: (1) at the firm level from improved access to market centers, (2) at the industry level from intra-industry localization economies, and (3) at the regional level from inter-industry urbanization economies. There is considerable variation in the sources and magnitudes of agglomeration economies between industrial sectors-in particular, our results indicate that access to markets through improvements in inter-regional infrastructure is an important determinant of firm level productivity, whereas benefits of locating in dense urban areas do not appear to offset associated costs. D

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Section: Background and Motivationmentioning

confidence: 99%

Agglomeration economies and productivity in Indian industry

Lall¹,

Shalizi

Deichmann

2004

Journal of Development Economics

197

147

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“…'[t]he more competitive the distant location, the greater will be the freight absorption of firms located at site (1).' (Greenhut and Greenhut 1975.) Greenhut (1981) found that negative changes in delivered price are frequently observed in West Germany and Japan over increasing distances along a given line.…”

Section: Numerical Examplementioning

confidence: 99%

“…The other issue takes firms' locations as given and considers their pricing. Greenhut and Greenhut (1975) and both consider the effect on prices of rival locations and the intensity of their competition, and Anderson and Neven (1991) compare uniform pricing, mill pricing and spatial price discrimination. We will follow this second line and consider pricing where firms' locations are given.…”

Section: Introductionmentioning

confidence: 99%

Price Patterns Resulting from Different Producer Behavior in Spatial Equilibrium

Mathiesen

2012

SSRN Journal

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We are concerned with economic analyses of markets from the perspective of supporting a decision maker selling in the market. The competitive pressure and the price formation are central issues. The goal of this paper is to highlight the remarkably different price patterns obtained from different modes of seller behavior in a spatial market. This is exemplified by models of price taking versus the oligopolistic Cournot mode of behavior. Although a particular market, namely the European market for natural gas is used for illustration, the insights from this exercise apply to any industry where suppliers have market power, their locations differ, and their costs of supplying individual segments of the market are non-negligible and differ. When market power is present and one seeks insight into competition and price formation, details in other dimensions cannot compensate for not modeling the exertion of market power.

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“…However, none of these studies explicitly model spatial competition. Greenhut and Greenhut (1975) make assumptions typically associated with spatial price discrimination, but do not test those assumptions outside of a model framework. Hastings (2000) examined local price changes during a natural experiment, when an independent (Thrifty) station became a vertically integrated (ARCO) station in the San Diego and Los Angeles metropolitan areas; she found quite clearly that the replacement of an independent station with a branded station led to prices five cents above market price for all gas stations within one mile of one another.…”

Section: 0mentioning

confidence: 99%