PRICING POLICY REACTIONS TO AGGLOMERATION IN A MARKET WITH SPATIAL SEARCH*

ABSTRACT. Price dispersion (variation) and agglomeration are common characteristics of spatial markets, in particular, markets with imperfect consumer information and search. However, pricing and location strategies in these markets are not well analyzed since spatial search is difficult to model without restricting the spatial dimension of the problem. This paper analyzes pricing and location strategies in a market with spatid search using a probabilistic modeling strategy that does not restrict search patterns in the plane. Specifically, the analysis considers the pricing strategy of an isolated firm in response to the agglomeration of competing firms. Results indicate that spatial and temporal price dispersion are effective responses to competitors'agglomeration. However, the relative effectiveness of these strategies varies with market conditions. In addition, agglomeration can have some counterintuitive effects. This paper also provides insights into existing theories of spatial search and spatial competition in spatially-restricted (linear and circular) markets.     

UPPER BOUNDS ON THE SIZES OF INTERREGIONAL FEEDBACKS IN MULTIREGIONAL INPUT-OUTPUT MODELS*

ABSTRACT. Upper bounds are presented for a measure of the overall percentage error caused in a multiregional input-output model when interregional feedback effects are ignored. This error figure is thus a measure of the magnitude of interregional linkages. The upper bounds are expressed as a function of the levels of self-sufficiency in the regions in the model and of the norms of the regional technical coefficients matrices. Experimental results are presented for a variety of examples that are thought to reflect real-world situations, and it is clear that in many cases the upper bound (and hence the error) is extremely small. The implication is that single-region input-output models may be adequate for a variety of questions.     

Reviews

CHANGING PERSPECTIVES IN BRITISH FOREIGN POLICY. Kenneth Younger. Chatham House Essays: 7. London, Oxford University Press, 1964. Pp. 139. 15/9.

BRITISH EMIGRATION TO AUSTRALIA. R. T. Appleyard. Australian National University, Canberra, 1964. Pp. xiii + 255. £2/17/6.

BRITAIN AND THE EUROPEAN COMMUNITY 1955–1963. Miriam Camps. London, Oxford University Press, 1964. Pp. x + 547. £A4.14.6.

INTERNAL WAR. Harry Eckstein (ed.). Glencoe, The Free Press, 1964. Pp. 339. $6.50.

MODERN GUERRILLA WARFARE. Franklin Mark Osanka (ed.). Glencoe, The Free Press, 1962. Pp. xxii + 519, bibliog.

MALAYSIA. K. G. Tregonning. Cheshire for the Australian Institute of International Affairs, 1964. Pp. 98. 13/6.

MALAYSIA; A SURVEY. Wang Gungwu (ed.). Melbourne, F. W. Cheshire, 1964. Pp. 466. £5.

SINGAPORE AND MALAYSIA. Milton E. Osborne. Data Paper: Number 53, Southeast Asia Program, Cornell University, 1964. Pp. 115. $2.50.

SOUTHEAST ASIAN UNIVERSITY. A COMPARATIVE ACCOUNT OF SOME DEVELOPMENT PROBLEMS. T. H. Silcock. Durham, North Carolina, Duke University Press, 1964. Pp. xiii + 194. $6.

CHINA. K. S. Latourette. New Jersey, Prentice‐Hall, 1964. Pp. viii + 152. $1.95.

MODERN CHINA. Edited by A. Feuerwerker. New Jersey, Prentice‐Hall, 1964. Pp. vi + 186. $1.95.

CEYLON. S. Arasaratnam. New Jersey, Prentice‐Hall, 1964. Pp. vi + 182. $1.95.

TRADITIONAL INDIA. Edited by O. L. Chavarria‐Aguilar. New Jersey, Prentice‐Hall, 1964. Pp. vi + 153. $1.95.

DEFIANCE IN MANCHURIA: THE MAKING OF JAPANESE FOREIGN POLICY, 1931–1932. Ogata Sadako. Berkeley and Los Angeles, Calif., 1964. Pp. xvi + 259, bibliog. $5, Aust. 65/6.

THE MILITARY AND SOCIETY IN LATIN AMERICA. John J. Johnson. Stanford University Press, California, 1964. x + 308 pp. $7.00.