THE CORE OF A SPATIAL PRICE EQUILIBRIUM GAME*

ABSTRACT This paper presents a critical appraisal of the use of the core as a solution concept for games involving spatially separated producers. Starting from the classical Samuelson/Takayama-Judge spatial price equilibrium model, the core of a game between the producers of commodities in this economy is defined, the conditions ensuring the nonemptiness of the core are stated, and the problems surrounding the definition and computation of the characteristic function are addressed. An application to the eastern United States’coal market is then presented in order to illustrate the usefulness of the theoretical and algorithmic results of this paper.     

COMPUTATIONAL COMPARISONS OF SPATIAL PRICE EQUILIBRIUM METHODS*

ABSTRACT. In this paper we propose new algorithms for the solution of both general and standard spatial price equilibrium problems, and test their performance with existing algorithms on randomly generated problems. For the standard problem, we propose decomposition schemes based on the concept of “equilibration operator” and compare their performance with the Frank-Wolfe method. For the general problem, we present alternative variational inequality formulations defined over Cartesian products of sets and then exploit these formulations to construct Gauss-Seidel-type serial decomposition methods. We then compare their performance with the projection method. Our computational tests suggest that the new schemes are substantially more efficient than earlier ones.     

THE EFFECT OF RETAIL FIRM OWNERSHIP ON PRICE EQUILIBRIUM*

ABSTRACT. This paper examines the effect of retail firm ownership on price equilibrium using a simple linear-city model. It is shown that price divergence emerges due to the differences in retail firm ownership, because retail firms under different ownership internalize shopping externalities differently. It is also shown that if a commercial center has two specialized retail firms, these stores charge the same markup for different goods at the equilibrium.     

GENERAL EQUILIBRIUM OF SPATIAL PRODUCT AND LABOR MARKETS*

ABSTRACT A simple general equilibrium model relates spatial product markets and spatial labor markets. The firm is treated as being a spatial monopolist or as a Löschian competitor in the output market and as a spatial monopsonist in the labor market. Derived free spatial demand and free regional labor supply are defined, and their properties examined. The model provides the framework for analyzing the impact of a technological improvement in labor productivity on the structure of the spatial markets. The impact of entry on spatial labor supply is an important determinant of whether or not entry lowers wages and raises output prices. Unlike the spaceless competitive paradigm, zero-profit long-run equilibrium can occur in a space economy under conditions of increasing returns to scale.     

GENERAL EQUILIBRIUM ANALYSIS OF URBAN SPATIAL STRUCTURE. THE PORT-CITY MODEL RECONSIDERED*

In this paper, I consider a general equilibrium urban spatial structure in the setting of a port city by adopting Cobb-Douglas type functional forms for production and utility functions. Unlike previous port-city models, this one can generate four land-use patterns, that is, (1) monocentric, (2) completely integrated, (3) partially integrated (with integration at the center), and (4) partially integrated (with integration at the urban fringe) land-use patterns, and the last pattern suggests a new explanation of suburbanization of employment. The existence and uniqueness of each land-use pattern is proven in a simple constructive way.     

THE MAXIMUM CAPTURE PROBLEM IN A WEIGHTED NETWORK*

ABSTRACT. In this paper, a conditional location problem on a weighted network is examined. Attraction functions are defined and the problem is formulated as a mixed integer program. A method which simultaneously locates an additional facility on the given network and optimizes its weight is then described. A numerical example is provided.     

THE OUTPUT EFFECTS OF SPATIAL PRICE DISCRIMINATION REVISITED*

ABSTRACT Some prior findings on spatial price discrimination are extended. Under certain spatially defined market conditions, discriminatory pricing is known to yield greater output than does nondiscriminatory f.o.b. mill pricing. However, this seemingly surprising result is based on the form of the basic demand function which is relatively less convex than a certain standard curve. The present paper makes this prior result more general by permitting the assumed basic demand to be relatively more convex.     

THE LAW OF ONE PRICE IN A NETWORK: ARBITRAGE AND PRICE DYNAMICS IN NATURAL GAS CITY GATE MARKETS*

ABSTRACT. In this paper we develop a model of the law of one price in a network where many markets are linked with a structure of paths. We show that arbitrage-free prices depend on the structure of the network and so do price dynamics. Our estimates indicate that local bypass and open access pipeline transportation were instrumental in opening arbitrage paths to natural gas city markets and causing their prices to converge. Spot markets in the city gates, pipeline hubs, and production fields, that are scattered over distant points in the vast pipeline network in the United States, now form a single market.     

AN ECONOMIC INTERPRETATION OF KUHN'S DUAL FOR THE STEINER-WEBER PROBLEM A NOTE*

In this paper, we given an economic interpretation of Kuhn's dual of the Steiner-Weber problem. It depends essentially on the notion that different transportation systems arerelevant for the primal and the dual. Moreover, the Euclidean metric underlies the interpretation of the primal, the block one that of the dual.