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Discussion Paper Details

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Title: From Local to Global Competition

Author(s): Simon P Anderson and André de Palma

Publication Date: January 1996

Keyword(s): CES, Global Competition, Localized Competition, Logit, Monopolistic Competition and Product Differentiation

Programme Area(s): International Trade and Regional Economics

Abstract: We introduce a framework that has known models of oligopolistic competition with differentiated products (the circle and the constant elasticity of substitution (CES)) as limit cases. This integrative approach incorporates both localized and global competition, as well as price-sensitive individual demands. It is used to consider the qualitative impact of major changes over the last two centuries: reduction in transport costs, increased taste for variety, population growth, and use of technologies with greater returns to scale. We work out the properties of an extended Chamberlinian model that should be useful both in industrial organization and urban economics.

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Bibliographic Reference

Anderson, S and de Palma, A. 1996. 'From Local to Global Competition'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1328