The Equivalence of Convex and Concave Transport Cost in a Circular Spatial Model with and without Zoning

Estudios de Economía, Vol. 42, No. 1, June 2015

16 Pages Posted: 20 Jun 2015

See all articles by Hamid Hamoudi

Hamid Hamoudi

Universidad Rey Juan Carlos

Isabel Rodríguez Iglesias

Universidad Rey Juan Carlos

Marcos Martín-Bustamante

Universidad Rey Juan Carlos

Date Written: June 14, 2015

Abstract

This article depicts a location game in a circular market. The equivalence results between a convex and a concave transport cost are reexamined by assuming an arbitrary length. In contrast to previous research the solution found shows that the equivalence relationship depends on the space length. Furthermore, the analysis is extended to a circular model with unitary length and zoning. In this case equivalence does not hold. Moreover, non-existence of equilibrium is shown under strictly linear quadratic functions. Surprisingly, equilibrium exists for a concave quadratic function but not for a convex quadratic function.

Keywords: Convexity, concavity, spatial competition, circular model, transport costs, regulator

JEL Classification: C72, D43, L13, R38

Suggested Citation

Hamoudi, Hamid and Rodríguez Iglesias, Isabel and Martín-Bustamante, Marcos, The Equivalence of Convex and Concave Transport Cost in a Circular Spatial Model with and without Zoning (June 14, 2015). Estudios de Economía, Vol. 42, No. 1, June 2015, Available at SSRN: https://ssrn.com/abstract=2618309

Hamid Hamoudi

Universidad Rey Juan Carlos ( email )

Isabel Rodríguez Iglesias (Contact Author)

Universidad Rey Juan Carlos ( email )

Marcos Martín-Bustamante

Universidad Rey Juan Carlos ( email )

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