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An Urban Configuration with Online Competition

  • Fu-Chuan Lai EMAIL logo
Veröffentlicht/Copyright: 26. September 2022
The B.E. Journal of Theoretical Economics
Aus der Zeitschrift The B.E. Journal of Theoretical Economics Band 23 Heft 2

Abstract

This paper introduces the impact of online competition to analysis of the urban configuration of a small open city, which was first developed by Alonso (1964. Location and Land Use. Cambridge: Harvard University Press), Mills (1967. “An Aggregative Model of Resource Allocation in a Metropolitan Area.” The American Economic Review 57 (2): 197–210), and Muth (1969. Cities and Housing. Chicago: University of Chicago Press) (AMM hereafter). In comparison to a revised AMM model in Lai and Tsai (2008. “Simplified Alonso-Mills-Muth Model with a Monopoly Vendor.” Journal of Urban Economics 63 (2): 536–43) which assumed a monopoly vendor, the present paper’s online entry brings competition, eventually causes price reduction, city expansion, and asymmetrically ascending land rent, and makes the incumbent vendor relocate to a more remote city boundary. When the disadvantage of online purchasing is not large, the urban configuration demonstrates that most residents purchase online, and only the residents living near the physical vendor make shopping trips. Finally, the benefit of city expansion from online competition eventually goes to the absentee landowners by way of the raised land rents.

Keywords: urban configuration; location; online competition; AMM models; retailers
JEL Classification: L16; P25; R12; R32
Corresponding author: Fu-Chuan Lai, Academia Sinica, Research Center for Humanities and Social Sciences, Nankang, Taipei 11529, Taiwan; and Department of Public Finance, National Chengchi University, Taipei, Taiwan, E-mail:

Funding source: Ministry of Science and Technology, Taiwan

Award Identifier / Grant number: MOST 107-2410-H-001-027

  1. Research funding: Financial support from the Ministry of Science and Technology of Taiwan (MOST 107-2410-H-001-027) is deeply appreciated.

  2. Conflict of interest statement: The author declares no conflicts of interest regarding this article.

  3. Author contribution: The author has accepted responsibility for the entire content of this submitted manuscript and approved submission.

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Received: 2022-02-13
Revised: 2022-06-09
Accepted: 2022-07-10
Published Online: 2022-09-26

© 2022 Walter de Gruyter GmbH, Berlin/Boston

Artikel in diesem Heft

  1. Frontmatter
  2. Research Articles
  3. Collusion, Shading, and Optimal Organization Design
  4. Software Cracking and Degrees of Software Protection
  5. The R&D Investment Decision Game with Product Differentiation
  6. An Urban Configuration with Online Competition
  7. Double Implementation in Dominant Strategy Equilibria and Ex-Post Equilibria with Private Values
  8. Risk Aversion and Uniqueness of Equilibrium in Economies with Two Goods and Arbitrary Endowments
  9. On Iterated Nash Bargaining Solutions
  10. Inter-league Competition and the Optimal Broadcasting Revenue-Sharing Rule
  11. The Weak Hybrid Equilibria of an Exchange Economy with a Continuum of Agents and Externalities
  12. Choosing Sides in a Two-Sided Matching Market
  13. Notes
  14. On the Relation between Private Information and Non-Fundamental Volatility
  15. Cost-Reducing Technologies and Labor Supply in a Krugman-type Model where Consumption is Time-Constrained: Some New Results
https://doi.org/10.1515/bejte-2022-0017
Schlagwörter für diesen Artikel
urban configuration; location; online competition; AMM models; retailers

Artikel in diesem Heft

  1. Frontmatter
  2. Research Articles
  3. Collusion, Shading, and Optimal Organization Design
  4. Software Cracking and Degrees of Software Protection
  5. The R&D Investment Decision Game with Product Differentiation
  6. An Urban Configuration with Online Competition
  7. Double Implementation in Dominant Strategy Equilibria and Ex-Post Equilibria with Private Values
  8. Risk Aversion and Uniqueness of Equilibrium in Economies with Two Goods and Arbitrary Endowments
  9. On Iterated Nash Bargaining Solutions
  10. Inter-league Competition and the Optimal Broadcasting Revenue-Sharing Rule
  11. The Weak Hybrid Equilibria of an Exchange Economy with a Continuum of Agents and Externalities
  12. Choosing Sides in a Two-Sided Matching Market
  13. Notes
  14. On the Relation between Private Information and Non-Fundamental Volatility
  15. Cost-Reducing Technologies and Labor Supply in a Krugman-type Model where Consumption is Time-Constrained: Some New Results
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