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The B.E. Journal of Economic Analysis & Policy

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Volume 13, Issue 2


Volume 18 (2018)

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

The Welfare Effects of Location and Quality in Oligopoly

Luis Carlos Corchón / Galina Zudenkova
Published Online: 2013-07-30 | DOI: https://doi.org/10.1515/bejeap-2012-0045


In this article, we show that in models where location is endogenous, maximum welfare losses arising from non-optimal locations or from the lack of market coverage may be substantial. In contrast, maximum welfare losses arising from non-optimal quality choices are more modest, but they might vary discontinuously with the dispersion in consumer tastes. Very often, welfare losses can be inferred from data.

Keywords: welfare losses; horizontal differentiation; Hotelling model; Salop model; vertical differentiation

JEL Classification: D61; L11; L13; L50


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About the article

Published Online: 2013-07-30

Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 13, Issue 2, Pages 1143–1178, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2012-0045.

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