Spatial Price Discrimination in Two-Dimensional Competitive Markets

Intuition suggests that firms that can apply price discrimination make higher profits than firms that are restricted in their pricing policy. In this paper, we show that, in general, this is not the case. In the framework of a two-dimensional spatial model with elastic demand à la Lösch, we further investigate the interplay of transport costs, competition, and price policy. One of our results is that under realistic specifications of parameters each firm gains a monopolistic area in the center of its market that has the same shape as the entire market, but with a convexly or concavely distorted separating line, depending on the extension of the market.     

Competitive Location and Pricing on Networks

In this paper we consider a location and pricing model for a retail firm that wants to enter a spatial market tvhere a competitor firm is already operating as a monopoly with several outlets. The entering firm seeks to determine the optimal uniform mill price and its servers' locations that maximize profits given the reaction in price of the competitor firm to its entrance. A tabu search procedure is presented to solve the model together with computational experience and an example.     

Competitive Location and Pricing on Networks

In this paper we consider a location and pricing model for a retail firm that wants to enter a spatial market where a competitor firm is already operating as a monopoly with several outlets. The entering firm seeks to determine the optimal uniform mill price and its servers' locations that maximize profits given the reaction in price of the competitor firm to its entrance. A tabu search procedure is presented to solve the model together with computational experience and an example.     

A Threshold-Satisfying Competitive Location Model

In this paper we consider a location model based on the threshold concept. We find the best location such that the probability of revenue falling short of the threshold is minimized. This objective is appropriate when a firm will not survive if its revenue falls below a known threshold. A new store is to be located. Demand is not deterministic but rather has a statistical distribution. We seek the location at which the probability that the revenue (expressed as market share attracted by the new store) is below a given threshold is minimized. The model is formulated and solved, and computational results are given.     

Location Equilibrium for Cournot Oligopoly in Spatially Separated Markets

Consider a two-stage non-cooperative Cournot game with location choice involving n≥ 2 firms each with several facilities. There are m≥ 2 spatially separated markets constituting the vertices of a network. Each firm first selects the locations of their facilities and then selects the quantities to supply to the markets to maximize its profit. There exists a Nash equilibrium in the quantities offered by each firm at the markets. Furthermore, when the demand in each market is sufficiently large, each firm chooses to locate its facilities only at vertices. With linear demand in each market, there exists a Nash location equilibrium.     

On the Logit Approach to Competitive Facility Location

The random utility model in competitive facility location is one approach for estimating the market share captured by a retail facility in a competitive environment. However, it requires extensive computational effort for finding the optimal location for a new facility because its objective function is based on a k -dimensional integral. In this paper we show that the random utility model can be approximated by a logit model. The proportion of the buying power at a demand point that is attracted to the new facility can be approximated by a logit function of the distance to it. This approximation demonstrates that using the logit function of the distance for estimating the market share is theoretically founded in the random utility model. A simplified random utility model is defined and approximated by a logit function. An iterative Weiszfeld-type algorithm is designed to find the best location for a new facility using the logit model. Computational experiments show that the logit approximation yields a good location solution to the random utility model.     

Optimal Facility Location in a One-Dimensional Spatial Market

This paper analyzes properties of the optimal spatial arrangement of what may be interpreted as a class of public facilities. Optimality is defined as cost minimization. Three different optimality criteria are considered, and for each, the necessary and, sufficient conditions, market area size, and production levels, are derived. The relationship between optimal production levels and number of facilities needed is also considered. Next the results of implementing various pricing strategies are analyzed with emphasis given to marginal and uniform pricing. It is shown that, given certain conditions, all facilities incur operating deficits, given marginal pricing. Estimates on the level of the deficits are derived in terms of location rents. Finally, in the appendix, several important results from other studies are derived as special cases of the basic model.     

Designing Markets: Why Competitive Bidding and Auctions in Government Often Fail To Deliver

Governments continue to embrace the market‐like mechanisms of auctions and bidding. This essay considers how governments (as bid‐takers) and firms and nonprofits (as bidders) strategically interact in the design and implementation of these systems. I assess with regard to the uniqueness of bidding in government four principles on the role of: credible commitments, rational collusion, the setting of reserve prices, and heterogeneity among bidders. I also address recent calls for expanding the use of dynamic pricing in government.     

东周都城遗址市场位置考辨

本文综合相关文献与考古发掘资料,认为东周时期各诸侯国都城中存在着多种功能的市场,其中主体官营市场在形态上具有规模化与封闭性特征,在位置上除了"面朝后市"与"工贾近市"外,还受到了当时城市发展的格局与地理环境的影响。依据上述特征,本文重新揭示考辨了四座诸侯国都城中的主体官营市场位置,即晋都新田的台神古城、赵都邯郸的小北城、燕下都故城的西城与中山灵寿城的西城。东周时期市场位置与形态的多元化适应了当时城市发展的需要,为秦汉城市市场的发展奠定了基础。     

Problems of Optimal Location of an Industrial Complex

Reverting to the problem of location of the next major iron and steel plant, based on ore from the Kursk Magnetic Anomaly, the authors present the pro-Siberian view. They contend that advocates of a Central Russian location of such a steel plant ignore both the water and land costs in the construction of such a complex, which would tend to argue against a western location, and the effect of such a complex in promoting regional development, which would have a positive impact in the underdeveloped eastern regions. Cost calculations are presented to show that even if the Siberian plant is supplied by long-haul ore from the Kursk Magnetic Anomaly, a Siberian location would be of greater benefit to the Soviet economy as a whole than a Central Russian location. The benefit would be even more marked if the design calculations involved not just the choice of site for one iron and steel plant, but the comparative costs of an iron and steel plant (an energy-intensive industry) in Siberia and a labor-intensive industry in Central Russia. For the pro-European view in the choice of a steel-plant site, see the Gladkevich article in Soviet Geography, November 1971.     

The Optimal Nodal Location of Public Facilities With Price-Sensitive Demand

The purpose of this paper is to present some models for the location of public facilities in nodal networks that explicitly maximize social welfare by accounting for price-elastic demand functions. The models presented here are general; yet they are mathematically equivalent to the plant location problem and are therefore amenable to solution procedures developed for the plant location problem. The models presented here distinguish between two institutional environments that reflect the degree of power of the consumer to choose which facility to patronize. If consumers can be assigned arbitrarily to facilities and can be denied service, then the environment is one of public fiat. If consumers must be served at the facility of their choice, then a “serve-allcomers” environment exists. Separate models for each environment are specified, and the relationship between optimal assignments and pricing policies is developed.     

Transport Rate Uncertainty and the Optimal Location of the Firm: Some New Conclusions

This paper presents standard microeconomic models that are designed to be used in the cost-benefit analysis of local land use decisions. The models connect these allocation decisions to outcomes in the urban land and labor markets so that costs and benefits can be measured. Benefits to the local jurisdiction of allocating land to industrial use exist if unemployed workers are employed, land values increase, or local tax revenues increase beyond the amount needed to provide the additional public services required.     

Female Migration and Urban Labour Markets in Tianjin

The spontaneous, large-scale population movement from the countryside to the cities witnessed in China since the early 1980s has drawn increasing attention in academic circles. However, research has tended to focus on quantitative macro-level data collection and interpretation rather than on the experiences of those involved in the migratory process. Using qualitative research methods, this article presents the experiences and perceptions of the Chinese rural female migrants as narrated by themselves. It attempts to identify by this means the major forces behind rural women's out-migration and the institutional changes and structural barriers that have shaped women's lives and experiences in the migratory process. The author argues that women are actors and agents in this unprecedented economic and social transformation. Through their active engagement in the urban labour market, female migrants have challenged both the traditionally defined gender roles and the spatial and socio-economic boundaries that have been structurally designated to them. Their actions may catalyse a radical rearrangement of the social, political and sexual orders.     

Search and Fetter's Law of Markets

Fetter's law, a classical result of location theory, is respecified to include search costs. Then the implied partition of the market space is derived.     

Determination of an Optimal Location for an Iron and Steel Plant Based on Iron Ore of the Kursk Magnetic Anomaly

A locational study of the Iron-Steel Design Institute is criticized on the ground that it selected potential plant sites intuitively and then examined them in terms of proximity to iron ore, water availability and minimal transport requirements. An alternative methodology is proposed. The general region for the new plant is first established on the bases of the interregional balance of iron and steel products. The Central European region is found to have a deficit in the entire product range. A more specific location is then derived by calculating potential transport costs with respect to both markets and sources of raw materials (iron ore, coke). The Rzhev area of Kalinin Oblast is found to be optimal in terms of transport costs alone. But when water and, particularly, labor resources are considered, preference shifts in favor of a plant location in the Gor'kiy-Kostroma area.     

Testing for the Law of One Price and Identifying Price-Leading Markets: An Application to Corn Markets in Benin

A data-determined method is proposed to test for the law of one price as a long-run equilibrium condition and to identify which markets in a network of spatially dispersed commodity markets quote the reference price. The method consists of supplementing Johansen's FIML cointegration procedure with a permanent-transitory decomposition and rules of inference in linear time-series models with unit roots. As an example, we apply our method to prices of six corn markets in Benin. We find that the law of one price holds in the long-run. It appears that two rural markets quote the reference price: their prices adjust fastest towards the permanent change induced by the common stochastic trend.     

‘Milking The Elephant’: Financial Markets as Real Markets in Kenya

Financial liberalization policies in the 1990s were intended to raise formal sector interest rates, enhance competition and expand access for users. This article investigates patterns of provision and use in a local financial market in Karatina, Kenya, at the end of the 1990s after a period of financial and economic liberalization. It takes a holistic approach, examining both formal and informal financial arrangements and microfinance interventions. This is because the role of the informal financial sector is particularly important for poor people and has received relatively little attention in the discussion of the consequences of reform. The author does this using a ‘real’ markets approach that sees markets as socially regulated and structured. Significant provision by the mutual sector (formal and informal), and poor lending performance by the banking sector is explained through an examination of the characteristics of the services on offer and their embeddedness in social relations, culture and politics.