PRODUCT DIFFERENTIATION,PRICING POLICY AND EQUILIBRIUM*

ABSTRACT. This paper studies the price-location equilibrium of duopolists supplying differentiated goods and competing in a spatial market with elastic demand. We show that a price-location equilibrium exists under all three pricing policies traditionally considered by the literature: f.o.b. mill, uniform delivered, and spatially discriminatory pricing. We also show that firms always cluster at the market center. The second part of the paper studies the endogenous choice of pricing policy. A surprising feature of the resulting equilibrium is asymmetry. The greater the extent to which the goods are substitutes, the more likely is it that one firm will choose f.o.b. pricing and the other price discrimination. Finally, the welfare consequences of the analysis show some interesting trade-offs.     

A SPATIAL COMPETITION APPROACH TO CENTRAL PLACE THEORY: SOME BASIC PRINCIPLES*

ABSTRACT. This paper investigates the potential offered by the model of spatial competition for the study of central place theory. We consider n firms selling m substitutable or complementary goods to a continuum of consumers evenly distributed along a linear segment. Consumers have the same income and the same utility function which is quadratic in the goods supplied by the firms and linear in the numeraire. The main results are as follows. (1) In any location equilibrium in which all goods are consumed everywhere, each good supplied by a single firm is sold at the market center. In Christaller's terminology, this means that when the exhaustive principle holds in equilibrium, highest-order goods are made available at the center. (2) When all goods (excluding the numéraire) are complements to each other and each good is sold by a single firm, there always exists an equilibrium in which all the firms locate coincidentally. (3) If the stores selling a given good are under the control of a single owner then, in any equilibrium for which the exhaustive principle holds, the stores are located in a way such that the total transport cost (borne by consumers) is minimized.     

A NOTE ON THE STABILITY PROPERTY OF SPATIAL COMPETITION*

ABSTRACT. Our study extends the standard comparative static analysis to allow for dynamic aspects of equilibrium in spatial competiton. We investigate dynamic stability properties via the Routh-Hurwitz criterion. Nontrivial equilibria in the so-called Löschian, Hotelling-Smithies, and Greenhut-Ohta models are shown to be stable even under heterogeneous cost conditions among competing firms, conditions not considered hitherto. We can thus provide powerful support to the comparative static analyses which can only be developed via equilibrium concepts with stability properties.     

CULTURAL IDENTITY AND KNOWLEDGE CREATION IN COSMOPOLITAN CITIES*

ABSTRACT We study how the city system is affected by the possibility for the members of the same cultural diaspora to interact across different cities. In so doing, we propose a simple two‐city model with two mobile cultural groups. A localized externality fosters the productivity of individuals when groups interact in a city. At the same time, such interaction dilutes cultural identities and reduces the consumption of culture‐specific goods and services. We show that the two groups segregate in different cities when diaspora members find it hard to communicate at distance whereas they integrate in multicultural cities when communication is easy. The model generates situations in which segregation is an equilibrium but is Pareto dominated by integration.     

Private production,collective consumption,and regional population structure: the interactions between public and private good provision as determinants of community composition

"Theories of trade and migration explain the distribution of individuals among regions based on private good productivities. The theory of local public goods (LPG's) uses collective good consumption economies to explain the size and composition of communities. This essay combines the two theories, to explore regional population heterogeneity and stability. Assuming that individuals must consume and produce in the same jurisdiction, the paper examines the nature of efficient allocations, the tensions between the private and public incentives, the nature of the equilibrium (if any) which migration among jurisdictions will generate, and how such equilibrium will depend on tax rules for sharing the costs of the LPG."     

Competition in a Repeated Spatial Auction Market with an Application to Timber Sales

In this paper we develop a model of a repeated spatial auction market. The auction model contributes to the literature on spatial competition by considering the sale of goods in a market with spatial and temporal dimensions, and in which goods are sold by an auction institution instead of a posted-price institution. In the Nash equilibrium of the spatial auction model, each bidder is found to have a dominance solvable strategy to bid below his net (of transportation costs) valuation for the first unit of the good because there is an option value to not winning, namely that the following units may be locationally preferred to the first unit. The equilibrium bidding strategies lead to the possibility of non–Pareto-efficient outcomes. The auction model is applied to data from U.S. Forest Service timber sales.     

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.     

2005 Cultural Heritage Legal Summary

Abstract

Archaeologists studying ancient state societies often divide political economic models into separate prestige goods and subsistence goods systems. For the Maya during the Late Classic period (ca. A.D. 600–900), scholars have suggested that the elite centrally controlled the production and circulation of prestige goods while local communities and households were responsible for subsistence goods manufacture and exchange, which operated in a largely decentralized fashion. We examine an alternative to this dichotomous system through a festival market model that postulates a wide array of social groups engaged in material goods exchange during ceremonial events and public festive gatherings. This model is investigated using modal, petrographic, and Instrumental Neutron Activation analyses (INAA) of Late Classic ceramic figurines from the Motul de San José region, Petén, Guatemala. Ceramic figurines are frequently associated with household affairs because of their presence in household middens. We find that paste types crosscut different household status groups and communities within the region and argue that figurines were exchanged within the context of festival markets. This exchange pattern has important implications for linking households to larger political and regional spheres of social and economic life.     

AGGLOMERATION AND GROWTH WITH ENDOGENOUS EXPENDITURE SHARES*

ABSTRACT We develop a New Economic Geography and Growth model which, by using a CES utility function in the second‐stage optimization problem, allows for expenditure shares in industrial goods to be endogenously determined. The implications of our generalization are quite relevant. In particular, we obtain the following novel results: (1) two additional nonsymmetric interior steady states emerge for some intermediate values of trade costs. These steady‐states are stable if the industrial and the traditional goods are either good or very poor substitutes, while they are unstable for intermediate (yet lower than one) values of the intersectoral elasticity of substitution. In the latter case, the model displays three interior steady states—the symmetric and the core‐periphery allocations—which are stable at the same time; (2) agglomeration processes may always take place, whatever the degree of market integration, provided that the traditional and the industrial goods are sufficiently good substitutes; (3) the regional rate of growth is affected by the interregional allocation of economic activities even in the absence of localized spillovers, so that geography always matters for growth and (4) the regional rate of growth is affected by the degree of market openness: in particular, depending on whether the traditional and the industrial goods are good or poor substitutes, economic integration may be, respectively, growth‐enhancing or growth‐detrimental.     

Stability of IRSL signals from sedimentary K-feldspar samples

Recent work has identified IR stimulated luminescence signals at elevated temperature from both potassium- and sodium-rich feldspars that have much lower anomalous fading rates than the conventional signal measured using IR stimulation at 50°C. This paper examines the stability of these signals for potassium-rich sedimentary feldspars. We show that the natural post-IR IRSL (pIRIR) signal from a 3.6 Ma old sample is in apparent saturation on a laboratory generated dose response curve, i.e. it does not show detectable fading in nature although a low fading rate is observed on laboratory time scales. We show that the pIRIR signal has a greater thermal stability than the IRSL signal and that the trend in increasing thermal stability is mirrored by a decreasing fading rate. We also investigate the effect of preheat temperature and IR stimulation power on the decay shape and conclude that the data can be explained in terms of either a single- or multiple-trap model. We present evidence that may suggest that at least part of pIRIR signal is derived from a high temperature trap (∼550°C thermoluminescence (TL) peak), although again the data can also be explained in terms of a single-trap model. Finally, we present dose response curves and characteristic curvature constants (D₀) values for various IRSL signals and conclude that the more stable signals saturate more quickly than the less stable signals and that the initial and final signals saturate at approximately the same level.     

A MODEL OF SHOPPING CENTERS*

ABSTRACT In this paper, we propose a model of developers' strategies for tenant mixes and the locations of shopping centers (SCs). Consumers have preferences for product variety, and tenants in the SCs sell differentiated goods. The consumers can choose two shopping behaviors: patronizing one or both of the two SCs. We show that if the consumers have strong preferences for product variety, the SCs agglomerate to free‐ride on the rivals' product varieties, and the consumers patronize both SCs. On the other hand, if consumer preferences are weak, the SCs locate at different locations, and the consumers patronize one of the two SCs.     

DRS. MUTH AND MILLS MEET DR. TIEBOUT: INTEGRATING LOCATION‐SPECIFIC AMENITIES INTO MULTI‐COMMUNITY EQUILIBRIUM MODELS*

ABSTRACT We consider the problem of integrating spatial amenities into locational equilibrium models with multiple jurisdictions. We provide sufficient conditions under which models that assume a single housing price in each community continue to apply in the presence of location‐specific amenities that vary both within and across communities. If these conditions are satisfied, the models, estimation methods, and results in Epple and Sieg (1999) are valid in the presence of (potentially unobserved) location‐specific amenities. We also show how to construct sufficient statistics that capture location specific spatial heterogeneity. We apply these techniques using data from the Pittsburgh metropolitan area. We find that these amenity measures capture proximity to important local employment centers as well as heterogeneity in school quality within a given school district.     

Investigation of the ‘canopy effect’ in the isotope ecology of temperate woodlands

Anomalously ¹³C-depleted carbon stable isotope values from closed forest ecosystems have been termed the ‘canopy effect’. Originally this was ascribed to recycling of depleted carbon from forest floor decomposition of organic material, although others have suggested that it is equally likely to be due to variations in leaf-level processes in response to increased shade. This depletion in the heavier carbon isotope is passed on to woodland herbivores feeding within the forest environments. A similar isotopic depletion has also been reported in the archaeological literature from more open temperate woodland settings, but no measurements have been made on the plants at the base of the food chain in order to quantify the effect. In this study we attempt this by examining the carbon and nitrogen stable isotopic values of different species of grasses from a range of open to closed habitat settings within Wytham Wood, Oxfordshire, UK. We find a strong relationship between carbon isotopic depletion of plant tissue and lowered light intensity with an up to 5‰ shift between grass grown in open and closed locations. In order to follow this up the food chain, we also report data on wool from sheep grazing in open pastures near the Wood, and on fallow deer living within the woodland, but which turn out not to show a strong canopy effect, probably related to their feeding strategies. We conclude that there is indeed a strong ‘canopy effect’ in temperate woodland, probably related to differential light levels, but that not all apparently woodland-dwelling mammals show such an effect. We also show considerable isotopic variation at the base of the food chain, which should counsel caution when attempting to interpret dietary isotopes using mixing models.     

Aspects of ancient Greek trade re-evaluated with amphora DNA evidence

Ancient DNA trapped in the matrices of ceramic transport jars from Mediterranean shipwrecks can reveal the goods traded in the earliest markets. Scholars generally assume that the amphora cargoes of 5th-3rd century B.C. Greek shipwrecks contained wine, or to a much lesser extent olive oil. Remnant DNA inside empty amphoras allows us to test that assumption. We show that short ∼100 nucleotides of ancient DNA can be isolated and analyzed from inside the empty jars from either small amounts of physical scrapings or material captured with non-destructive swabs. Our study material is previously inaccessible Classical/Hellenistic Greek shipwreck amphoras archived at the Ministry of Culture and Tourism Ephorate of Underwater Antiquities in Athens, Greece. Collected DNA samples reveal various combinations of olive, grape, Lamiaceae herbs (mint, rosemary, thyme, oregano, sage), juniper, and terebinth/mastic (genus Pistacia). General DNA targeting analyses also reveal the presence of pine (Pinus), and DNA from Fabaceae (Legume family); Zingiberaceae (Ginger family); and Juglandaceae (Walnut family). Our results demonstrate that amphoras were much more than wine containers. DNA shows that these transport jars contained a wide range of goods, bringing into question long-standing assumptions about amphora use in ancient Greece. Ancient DNA investigations open new research avenues, and will allow accurate reconstruction of ancient diet, medicinal compounds, value-added products, goods brought to market, and food preservation methods.     

Social capital determinants and labor market networks

We explore the links between determinants of social capital and labor market networks at the neighborhood level. We harness rich data taken from multiple sources, including matched employer–employee data with which we measure the strength of labor market networks, data on neighborhood homogeneity that has previously been tied to social capital, and new data—not previously used in the study of social capital—on the number and location of nonprofit sector establishments at the neighborhood level. We use a machine learning algorithm to identify the potential determinants of social capital that best predict neighborhood‐level variation in labor market networks. We find evidence suggesting that smaller and less centralized schools, and schools with fewer poor students, foster social capital that builds local labor market networks, as does a larger Republican vote share. The presence of establishments in a number of nonprofit‐oriented industries are identified as predictive of strong labor market networks, likely because they either provide public goods or facilitate social contacts. These industries include, for example, churches and other religious institutions, fire and rescue services including volunteer fire departments, country clubs and golf courses, labor unions, chamber music groups, hobby clubs, and schools.     

An Early Anglo-Saxon Cemetery and Archaeological Survey at Breamore,Hampshire, 1999–2006

A Byzantine pail, datable to the sixth century AD, was discovered in 1999, in a field near the River Avon in Breamore, Hampshire. Subsequent fieldwork confirmed the presence there of an early Anglo-Saxon cemetery. In 2001, limited excavation located graves that were unusual, both for their accompanying goods and for the number of double and triple burials. This evidence suggests that Breamore was the location of a well-supplied ‘frontier’ community which may have had a relatively brief existence during the sixth century. It seems likely to have had strong connections with the Isle of Wight and Kent to the south and south-east, rather than with communities up-river to the north and north-east.     

INDUSTRIAL CENTERS AND REGIONAL GROWTH IN THE PRESENCE OF LOCAL INPUTS*

ABSTRACT. A large proportion of regional production takes place in nontraded goods and services. In addition, significant productivity increases can be observed in some segments of this sector. Starting from these two empirical observations we construct a model of growth in a two-region setting with factor mobility. The growth process is based on endogenous technological change in the nontraded input sector, whose output serves as an input in the production of one of the two final goods, the so-called industrial good. We consider two extreme cases, one with locally limited, the other with interregional knowledge spillovers. Conditions are established under which interior solutions with production of local inputs and steady-state growth in both regions result, and others under which we find a core-periphery pattern with growth concentrated in one region only. The stability of the equilibria is discussed by considering the transition processes. Finally, it is shown that catching-up as well as leapfrogging may occur, if new technologies become available.     

AMENITIES VERSUS LABOR MARKET OPPORTUNITIES: CHOOSING THE OPTIMAL DISTANCE TO MOVE*

ABSTRACT. A recent debate in the regional economics literature has focused attention on the motivation behind an individual's decision to migrate. Human-capital migration models emphasize labor market disequilibria whereas alternative (hedonic) migration models stress households’altered demand for nontraded goods. In this paper, we test the relative importance of these two possible motivations for moving between metropolitan areas. We use an intercity hedonic model to decompose wages into equilibrium and disequilibrium components. We then compare the separate influences of amenities and the disequilibrium component of wages on the distance moved between two metropolitan areas. Our findings indicate that both economic factors and amenity differentials are significant factors in explaining regional migration.     

Osteological and paleodietary investigation of burials from Cova de la Pastora,Alicante, Spain

We present results of osteological and isotopic analyses of human remains from Cova de la Pastora (Alcoi, Alicante, Spain) and discuss the implications in light of a new sequence of radiocarbon dates indicating that the cave was used as a burial site in the Late Neolithic (ca. 3800–3000 cal BC), Chalcolithic (ca. 3000–2500 cal BC), Bell Beaker Transition (Horizonte Campaniforme Transicional - HCT; ca. 2500–2200 cal BC) and the Bronze Age (ca. 2200–1500 cal BC). Similarities in stable isotopic values of C and N indicate little variation in subsistence between men and women, and a similar nutritional base from the Late Neolithic to the Bronze Age. This pattern of stability is augmented by evidence of trauma and disease found on numerous skulls in the collection. Since no clear associations of specific grave goods with certain individuals based on sex or age could be determined, the only suggestion of social inequality lies in the burial practice itself, where certain individuals were interred in caves while others were not.