Abstract
We present a model of spatial price discrimination where R&D spillovers are endogenous as they depend on firms' location. We establish that both the distance between locations and R&D efforts are an increasing function of the transportation cost coefficient and show that there is a continuum of cases where firms will choose an intermediate location. The managerial implications from the model are discussed using examples of marketing behavior by Internet retailers.
| Original language | English |
|---|---|
| Pages (from-to) | 157-161 |
| Number of pages | 5 |
| Journal | Managerial and Decision Economics |
| Volume | 25 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 1 Apr 2004 |
| Externally published | Yes |