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Endogenous R&D spillovers and locational choice with discriminatory pricing
journal contributionposted on 30.05.2006 by Claudio Piga, Joanna Poyago-Theotoky
Any type of content formally published in an academic journal, usually following a peer-review process.
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.
- Business and Economics