Transportation gas emissions with online retailing: a spatial model

In this subsection, a two-stage game is analyzed; in the first stage, both stores declare their DAs simultaneously; then, in the second stage, stores determine their uniform price simultaneously. When there is no switching cost, the subgame Nash equilibrium in the second stage exists only if in the first stage stores choose DAs that cover most of the area, although they have incentives to shrink their DAs in the first stage. There is no subgame perfect equilibrium here.Further, when positive switching cost is assumed, the subgame perfect Nash equilibrium exists in limited cases, where the switching cost is sufficiently large. At the equilibrium, both DAs cover all the area, and the prices are increased up to the ceiling reservation price. This means no territories are established in this model, although the model aims to investigate equilibria where territories are established. A.2 Two-stage Game without Switching CostConsider Game 0 defined as: Game 0.X δ = 0.X The first stage: both stores declare their DAs simultaneously.X The second stage: stores choose their uniform price simultaneously.Except when both DAs were declared in the first stage to cover most of the market area, or when they are separated, Nash equilibrium does not exist in the second stage as is shown Lemma A1.

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An Urban Configuration with Online Competition

Lai

2022

The B.E. Journal of Theoretical Economics

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This paper introduces the impact of online competition to analysis of the urban configuration of a small open city, which was first developed by Alonso (1964. Location and Land Use. Cambridge: Harvard University Press), Mills (1967. “An Aggregative Model of Resource Allocation in a Metropolitan Area.” The American Economic Review 57 (2): 197–210), and Muth (1969. Cities and Housing. Chicago: University of Chicago Press) (AMM hereafter). In comparison to a revised AMM model in Lai and Tsai (2008. “Simplified Alonso-Mills-Muth Model with a Monopoly Vendor.” Journal of Urban Economics 63 (2): 536–43) which assumed a monopoly vendor, the present paper’s online entry brings competition, eventually causes price reduction, city expansion, and asymmetrically ascending land rent, and makes the incumbent vendor relocate to a more remote city boundary. When the disadvantage of online purchasing is not large, the urban configuration demonstrates that most residents purchase online, and only the residents living near the physical vendor make shopping trips. Finally, the benefit of city expansion from online competition eventually goes to the absentee landowners by way of the raised land rents.

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Transportation gas emissions with online retailing: a spatial model

Abstract: Let us consider the fringe-market structure. We use superscript "F" to indicate the fringemarket structure. In this market structure (see Figure 1) Firm RA and Firm RB demands are

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Raising the bar (23)

Raising the bar (23)

Competition for territories under the switching cost

An Urban Configuration with Online Competition

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