Spatial dispersion in Cournot Competition

Abstract

Several papers suggest that Cournot competition in a spatial model, with a uniform distribution of consumers, agglomerate at the center of the market. In this paper we prove that this is not true under an hyperbolic demand function and concave transport cost. Moreover we prove that under the above assumptions in the center of the market the firms obtain minimum profit reaching the maximum when both firms locate at opposite places of the market.