English, Article, Journal or magazine article edition: Regional inequality and product variety Kristian, BEHRENS; Jacques-Franois, THISSE

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Bookmark: http://trove.nla.gov.au/version/178016
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Regional inequality and product variety
Author
  • Kristian, BEHRENS
  • Jacques-Franois, THISSE
Physical Description
  • preprint
Notes
  • We investigate how differences in set-up costs of various types affect the trade-off between global efficiency and spatial equity and show that the standard assumption of symmetry in fixed costs masks the existence of an interesting effect : the range of available varieties varies depends on the spatial distribution of firms. In such a setting, even when the market outcome leads to excessive agglomeration under symmetric fixed costs, a planner opts for asymmetric fixed costs and more agglomeration. The reason is that the losses induced by more agglomeration are offset by the gains due to additional product variety.
  • fixed costs; set-up costs; market size; international trade; homemarket effect
  • RePEc:ctl:louvec:2005013
Language
  • English
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