Citation

Discussion Paper Details

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Title: Location Choice and Price Discrimination in a Duopoly

Author(s): Tommaso Valletti

Publication Date: December 1999

Keyword(s): horizontal and vertical differentiation, Location and Price Discrimination

Programme Area(s): Industrial Organization

Abstract: This paper analyzes the problem of price discrimination in a market where consumers have heterogeneous preferences over both a horizontal parameter (brand) and a vertical one (quality). A model with two firms competing over locations and non-linear contracts is analyzed. Discriminatory contracts are first characterized at each location. It is then shown that locations have a big impact on the firms' discriminatory ability and that equilibrium locations are non-monotonic in consumer types; however firms never locate too far away from the first and third quartiles.

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Bibliographic Reference

Valletti, T. 1999. 'Location Choice and Price Discrimination in a Duopoly'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2322