Product differentiation in a linear city and wage bargaining

Grandner, Thomas (2007) Product differentiation in a linear city and wage bargaining. Department of Economics Working Paper Series, 109. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.


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Economides (1986) has shown that within a linear city an equilibrium exists in a two-stage location-price game when the curvature of the transportation cost function is sufficiently high. One important point is that not all of these equilibria are at maximal differentiation. In this paper we include an additional stage with decentralized wage bargaining. This intensifies price competition resulting in locations that are nearer to the extremes of the city. The magnitude of this effect depends on the bargaining power of the unions.

Item Type: Paper
Keywords: linear city / product differentiation / wage bargaining
Classification Codes: RVK QC 150 ; JEL L13, J51
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 03 Oct 2007 11:38
Last Modified: 09 Mar 2020 14:06


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