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摘要
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It is known that if exogenous cost
heterogeneities between the firms in a spatial duopoly model are large, then
the model does not have a pure-strategy equilibrium in
location choices. It is also known that when these heterogeneities are
stochastically determined after firms choose their locations, spatial
agglomeration can appear. To tackle these issues, the current paper modifies
the spatial framework by allowing firms to exchange the cost-efficient
production technology via royalties. It is shown that technology transfer
guarantees the existence of a location equilibrium
in pure strategies and that maximum differentiation
appears in the market.
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