| The Journal of Real Estate Finance and Economics | |
| Volume 11, Issue 1, Article 4 (Abstract) | |
| Title: | Transportation Rates and Plant Location is Oligopolistic Competition with Sequential Entry |
| Author: | Guang-meei Doris Cheng and Yeung-Nan Shieh |
| Abstract: | This paper examines the impact of quantity-discounted transportation rates on location patterns of oligopolistic competition with sequential entry. When transportation rates are constant, Hwang and Mai (1990) show that the entrant locates at the same point as the existing firms if the production function exhibits constant returns to scale. The entrant will locate farther away from (closer to) the market than the existing firms do if the production function exhibits increasing (decreasing) returns to scale. This paper shows that Hwang and Mai's results need not hold when transportation rates are a function of quantity shipped and distance traveled. |
| Keywords: | transportation rates, plant location, Cournot oligopoly |