ZONING UNDER SPATIAL PRICE DISCRIMINATION |
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| Authors: | JUAN CARLOS BÁRCENA‐RUIZ FRANCISCO JAVIER CASADO‐IZAGA |
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| Institution: | Bárcena‐Ruiz: Associate Professor, Fundamentos del Análisis Económico I, Universidad del País Vasco, UPV/ EHU, Bilbao 48015, Spain. Phone 34+946013829, Fax 34+946013891, E‐mail juancarlos.barcena@ehu.es |
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| Abstract: | This paper investigates zoning in a duopoly model of spatial price discrimination. We find that the zone in which the firms are not allowed to locate depends on the bias of the regulator. A bias toward firms is deduced when locations around the central area are forbidden, and a bias toward consumers exists when firms are only allowed to locate at places around the central area. The design of the zoned area guarantees that firms locate optimally and works under simultaneous or sequential choice of locations by the two firms. (JEL L13, R38) |
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