Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104876
Authors: 
Henkel, Joachim
Stahl, Konrad O.
Walz, Uwe
Year of Publication: 
1997
Series/Report no.: 
Tübinger Diskussionsbeiträge 117
Abstract: 
We analyze the possibility and consequences of coalition-formation amongst suppliers of retail services. We first provide a framework in which producers of Substitutes have an incentive to Cluster in market places in order to attract consumers dispersed in space. Owing to spatial externalities, the resulting spatial equilibrium can be welfare suboptimal. We characterize regimes in which we find too little and those in which there is too much agglomeration of firms. We analyze the role of coalitions of firms (e.g. initiated by a land developer) in this framework and show that such coalitions can overcome the suboptimality of the decentralized spatial allocation.
Subjects: 
endogenous agglomerations
monopolistic competition
coalition building
JEL: 
D40
L13
R12
Document Type: 
Working Paper

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