spatial competition and vertical integration cement and concrete revisited reply in this review 1983 mark mcbride reconsiders the federal trade commission s ftc enforcement policy toward vertical mergers between cement and ready mix concrete firms in response to a significant increase in acquisitions of ready mix concrete firms by cement manufacturers during the 1960 s the ftc undertook a series of legal actions to block or dissolve the mergers the actions of the ftc constituted one of the most intensive efforts undertaken to date to challenge vertical mergers in a single industry mcbride p 1012 notes that the actions of the ftc provoked considerable debate concerning the motivation for the mergers both in the industry and in academe a significant number of articles were published advancing various reasons for the mergers in addition to the ftc s main contention that the mergers were motivated by a desire for captive markets it has been suggested that there were economies of integration or that the mergers were the outcome of an erroneous view of the potential benefits to foreclosure held by executives in the beleaguered cement industry 2 mcbride s 1983 paper offers another explanation for the mergers his argument is that vertical integration was undertaken to avoid rigid oligopolistic pricing in the cement industry 3 the empirical results presented by mcbride suggest that vertical integration was a significant factor in the decline of cement prices in the 1960 s the purpose of this comment is to point out some of the problems with mcbride s analysis in particular we show that the experimental design of his testing equation is faulty and does not offer a test of his hypothesis as a result mcbride s analysis does not provide convincing evidence on whether cement firms vertically integrated to avoid rigid oligopolistic pricing or if cement firms were merely reacting to prices that had already begun to decline our intent however is not to challenge mcbride s contention that vertical integration can provide lower prices to consumers rather we would argue that the evidence presented at the ftc hearings involving cement and ready mix concrete firms as well as mcbride s and others analyses illustrate the problems in discerning the motives for mergers 4

precommitment in competing vertical chains the design of distribution channels is an important marketing decision since a revision implies costly reorganization hence it makes sense to study strategic motives of alternative distribution devices a precommitment is a strategic move that affects the other players expectations on how oneself will behave and thus induces them to choose in one s own favor schelling 1960 how these tactics can be used by firms to favorably influence competition between vertical chains is the topic of the literature reviewed in this survey jel classification l22 l42 l81

spatial competition among multi store firms abstract the paper analyzes spatial cournot competition among multi store firms it demonstrates that the complex problem of determining equilibrium store locations for competing multi store firms can be approximated by a simple one in which each firm behaves as a multi store monopolist in choosing its store locations a firm s equilibrium store locations often coincide with its monopoly locations and in general converge to its monopoly locations as the demand grows larger when the firms have an equal number of stores the stores belonging to competing firms agglomerate at discrete points that coincide with each firm s monopoly store locations

on the optimality of the full cost pricing abstract this article is aimed at defining the full cost pricing as a leader follower game in two tier organizations i the upstream unit fixes the production capacity and uses it as a cost driver to compute the average cost ii the downstream unit operates on the market and chooses the output level on the basis of the average cost in the cournot oligopoly case the full cost pricing is compared with other pricing rules there exists a wide range of values of the fixed cost for which the full cost pricing dominates any other pricing rules in terms of gross profit

price and seller concentration in cement effective oligopoly or misspecified transportation cost abstract a positive correlation between price and seller concentration in cement markets disappears if a different proxy for transportation costs population density is included in the specification

alternative models of spatial competition the concept of a spatial price equilibrium underlies most studies of spatial movement and competition however this concept is based upon a notion of perfectly competitive markets that is often unrealistic for many markets such as the markets for oil and coal and ignores the existence of local spatial monopolies this paper presents alternative economic models of spatial competition and shows how all of these models can be solved with essentially the same solution algorithm specifically after reformulating the classical spatial price equilibrium model and two extensions of takayama and judge s monopoly model we state and analyze a cournot nash model and discuss solution algorithms we then generalize these models and algorithms to multiple commodities and networks with transshipment nodes we conclude with a brief discussion of possible extensions of this class of models and associated algorithms

issues in new political economy an overview a brief overview of the historical background nature and rapid growth in volume and scope of new political economy since the early 1980s is provided the paper continues with some general reflections on the strengths and weaknesses of the new political economy approach illustrated by the other contributions to this special issue of the journal of economic surveys the final section summarises these contributions

interest rate derivatives and bank lending abstract we study the relationship between bank participation in derivatives contracting and bank lending for the period 30 june 1985 through the end of 1992 since 1985 commercial banks have become active participants in the interest rate derivative products markets as end users or intermediaries or both over much of this period significant changes were made in the composition of bank portfolios we find that banks using interest rate derivatives experience greater growth in their commercial and industrial c i loan portfolios than banks that do not use these financial instruments this result is consistent with the model of diamond review of economic studies 51 1984 393 414 which predicts that intermediaries use of derivatives enables increased reliance on their comparative advantage as delegated monitors

vertical integration and firm boundaries the evidence since ronald h coase s 1937 seminal paper a rich set of theories has been developed that deal with firm boundaries in vertical or input output structures in the last twenty five years empirical evidence that can shed light on those theories also has been accumulating we review the findings of empirical studies that have addressed two main interrelated questions first what types of transactions are best brought within the firm and second what are the consequences of vertical integration decisions for economic outcomes such as prices quantities investment and profits throughout we highlight areas of potential cross fertilization and promising areas for future work

on credible delegation by oligopolists a discussion of distribution channel management several papers in the recent marketing literature have suggested that delegation in distribution e g the use of independent middlemen helps manufacturers to precommit strategically to profit enhancing competitive actions further the literature suggests that the profitability of such actions depends on market structure we challenge these conclusions here this is done in two steps first we perform an analysis of the entire class of models which have been used in the literature using internally consistent assumptions about market structure and contracting the only subgame perfect equilibrium is one in which all distribution channels have infinitely many levels of delegation obviously this is not what we see in the real world next we relax a key hidden assumption namely that all intra channel agreements are observable to competitors without this assumption the usual results unravel unless channel members can offer credible guarantees that unobservable agreements do not exist the strategic effects of delegation disappear since these guarantees are virtually impossible to maintain credibly we would expect to reject the hypothesis in the earlier literature relating channel structure to competition in an empirical study controlling for observability we conclude that mechanisms other than strategic ones must be responsible for the existence of delegated channels and make some suggestions about promising avenues for future theory research in channel structure

a simple spatial model for edgeworth cycles abstract maskin and tirole 1998 formalise edgeworth s 1925 model of a dynamic equilibrium between two players where prices increase sharply and decrease slowly the edgeworth cycle here we present an application of the model showing how edgeworth cycles might arise in a marketplace where spatial competition is important we illustrate the approach using the example of retail gasoline markets where edgeworth cycles have been widely observed

slotting allowances as a facilitating practice by food processors in wholesale grocery markets profitability and welfare effects slotting allowances which are lump sum transfers paid by food manufacturers to grocery retailers in return for various retail concessions are becoming increasingly common in wholesale grocery markets this article extends the literature on slotting allowances by considering two features that previously have been ignored the role of food processors in determining these pricing arrangements and the effect of slotting allowances on the size and distribution of economic surplus slotting allowances motivated by food processors increase procurement quantities and farm prices and this raises farm surplus increases total producer surplus and improves consumer welfare in the food system

vertical structure and strategic environmental trade policy abstract the idea that environmental trade policy can be used to achieve competitive advantage in international markets has important implications for the way we conceive free trade this paper considers strategic environmental policy in a model that makes explicit the vertical structure that supports production of the traded good including intranational vertical relationships in the analysis of strategic environmental trade policy has substantial qualitative effects when vertical contracts are allowed the optimal policy to levy on a polluting input under both quantity and price competition in the international market is the pigouvian tax

risk and hedging do credit derivatives increase bank risk abstract the objective of this paper is to investigate whether financial innovation of credit derivatives makes banks more exposed to credit risk although credit derivatives are important for hedging and securitizing credit risk and thereby likely to enhance the sharing of such risk some commentators have raised concerns that they may destabilize the banking sector this paper investigates this issue in a simple model driven by costs of financial distress the analysis identifies two effects of credit derivatives innovation they enhance risk sharing as suggested by the hedging argument but they also make further acquisition of risk more attractive the latter effect if dominant can therefore destabilize the banking sector the critical factor is perhaps surprisingly the competitive nature of the existing underlying credit markets as these markets become more elastic the threat of destabilization increases the paper discusses issues related to bank regulation within the context of the model

make buy or ally a transaction cost theory meta analysis since the publication of williamson s markets and hierarchies many empirical articles have investigated the tenets of transaction cost theory using meta analytic techniques we quantitatively syn

the paradox of vertical integration antitrust policy and commentary include a persistent suspicion that vertical integration may increase market power in the integrated industries the facet of this suspicion that economists have analyzed most is conveyed as follows suppose that a pure monopoly sells an intermediate good to the firms in a final product industry and that the monopolist acquires all of those firms since the firms in the final product industry have been combined vertical integration has extended monopoly to a second industry the integration does not improve production technologies or product traits in either industry nor reduce transaction costs thus abstracting from any economies of integration this paper concerns the paradox that economic models usually show vertical integration increasing economic welfare in spite of the extension of monopoly and even in the absence of any economies since economies would also enhance welfare these models contradict the suspicion that vertical integration is harmful in a recent survey of these models blair and kaserman have commented that o n the basis of these results the economics profession generally argued that the appropriate antitrust policy regarding vertical integration was conciliation at best or neutrality at worst 2 2 the only contrary result is in models where inputs are substitutable in final production sometimes vertical integration reduces welfare however in order to focus sharply on the paradoxical welfare result this paper assumes fixed input proportions and ignores any economies of integration section i has a summary model that sets the stage for the succeeding analysis the principal discovery of this paper is that the paradox is not in general valid even for a simplified model this discovery appears when the assumption of pure input monopoly which is universal in the existing literature is relaxed in section ii the new model includes situations in which integration reduces welfare contrary to the usual result these contradictory situations have strong implications for antitrust policy because the analysis also shows that they ate the only kinds of situations that antitrust enforcers are likely to confront

note on duopolistic vertical restraints abstract this paper reexamines a three stage game previously applied by gal or duopolistic vertical restraints european economic review 35 1237 1253 1991 to model manufacturers choice of vertical restraints with downstream exclusive dealers we show that the main result of the original paper hinges upon the used linear demand specification employing a modified demand technology we find that a lp lp equilibrium can be compatible with high product differentiation as long as total demand is sufficiently inelastic the elasticity of total demand turns out to have a decisive but so far neglected influence on double marginalization and on manufacturers choice of contract

cournot competition yields spatial agglomeration most theoretical models of spatial competition show a strong tendency toward spatial dispersion of firms yet common observations suggest that firms tend to agglomerate in this paper the authors show that competition between cournot type oligopolists that discriminate over space leads to spatial agglomeration one implication is that firms do not necessarily earn supernormal profits at the free entry equilibrium copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

interest rate derivatives at commercial banks an empirical investigation abstract i analyze the effects of bank characteristics and macroeconomic shocks on interest rate risk management behavior of commercial banks my findings are consistent with hedging theories based on cost of financial distress and costly external financing banks with higher probability of financial distress manage their interest rate risk more aggressively both by means of on balance sheet and off balance sheet instruments as compared to the derivative users the derivative non user banks adopt conservative asset liability management policies in tighter monetary policy regimes finally i show that the derivative non user bank s lending volume declines significantly with the contraction in the money supply derivative users on the other hand remain immune to the monetary policy shocks my findings suggest that a potential benefit of derivatives usage is to minimize the effect of external shocks on a firm s operating policies

vertical coordination antitrust law and international trade this paper demonstrates that vertically aligned private or public organizations are capable of generating strategic trade advantage similar to that acquired through direct government export subsidization the model considers two forms of vertical coordination that lead to advantageous trade positions in international markets upstream vertical restraint and downstream equity sharing such practices are commonly employed both by state trading agencies and by private firms in nations with lenient antitrust laws the finding has important implications under new world trade organization wto rules intended to reduce government intervention in international transactions recent reforms in the wto favor nations that sanction highly refined vertical linkages between firms while nations with stringent antitrust legislation have an incentive to negotiate for greater harmonization of international laws

technological change and the boundaries of the firm the authors examine a firm s decision either to produce an essential input itself or to hire a subcontractor to produce the input the authors focus on how this decision is affected by technological change in the industry in general cost reducing technological change leads the firm to produce the input itself more often the firm s calculus is shown to depend on whether the subcontractor s skills are idiosyncratic or transferable in the latter case technological progress can even be detrimental to the firm and to society as a whole copyright 1991 by american economic association

unions in oligopolistic vertically connected industries a model of two unionized vertically connected oligopolistic industries is analyzed economic performance measured by consumer prices depends on the institutional setting of wage bargaining two externalities may occur namely an integration and a competition externality which have contrary effects with decentralized bargaining no externalities can be internalized resulting in low consumer prices with bargaining at the industry level only the competition externality is internalized resulting in high prices with centralized bargaining both externalities can be internalized resulting again in low prices with at least two firms in each industry the decentralized setting performs best performance improves with an increase in the competition of the product markets author s abstract

the reaction of bank stock prices to news of derivatives losses by corporate clients abstract from march through may of 1994 several large nonfinancial firms announced millions of dollars in losses from derivatives deals especially those arranged by bankers trust accompanying these announcements and related news stories were allegations that bankers trust had either misrepresented lied or deceived its clients using sur methods we investigate how these announcements affected bankers trust and three portfolios of banks dealers nondealers and nonusers our results indicate significant cumulative abnormal returns of 12 14 bankers trust 5 56 13 dealer banks and 2 45 32 nondealer user banks the evidence suggests an intra industry information transfer effect consistent with rational pricing the replacement cost of derivative contracts is an important factor in explaining the variation in abnormal returns across banks

trade flows in a spatial oligopoly gravity fits well but what does it explain large distance and border effects on trade flows in some industries may result from the collusive division of geographic markets in the brazilian cement industry traditional gravity equations fit the data well yet limited regional flows are due to firms strategic behaviour thanks to a unique institutional setting and an unusually rich data set i directly control for trade costs which despite their importance cannot account for the observed segmentation of local markets at current prices the paper highlights how collusive behaviour can magnify the effects of distance as firms use geography to coordinate on higher prices and less cross hauling les effets de grande distance et de frontieres sur les flux de commerce dans certaines industries peuvent etre le resultat d une division collusive des marches geographiques dans l industrie bresilienne du ciment les equations de gravite s ajustent bien aux donnees mais les flux regionaux limites entre regions sont attribuables au comportement strategique des firmes gr ce a un contexte institutionnel unique et a une base de donnees inhabituelles l auteur a pu prendre en compte directement les couts du commerce qui malgre leur importance ne peuvent pas expliquer la segmentation observee des marches locaux aux prix courants le memoire met en lumiere comment le comportement de collusion peut magnifier les effets de distance a proportion que les firmes utilisent la geographie pour assurer une coordination fondee sur des prix plus eleves et moins de transport transfrontalier

process innovation product differentiation and channel structure strategic incentives in a duopoly in this paper we analyze the joint implications of two effects a inserting independent profit maximizing retailers into thechannel system provides buffering to the manufacturers from price competition when their products are highly substitutable and intrachannel contracts are observable as shown by mcguire and staelin 1983 under the assumption of constant marginal production costs and b lack of channel coordination results in a reduction in manufacturer s incentives to invest in efforts to reduce production costs as shown by jeuland and shugan 1983 for the case of bilateral monopoly we show that both these results are robust in the sense that the first holds even in the presence of the vertical externality of manufacturer s effort reduction in a noncoordinated channel and the second holds regardless of the degree of substitutability between the competing channel s products specifically we analyze a four stage game with two manufacturers and two retailers where the intrachannel contracts are linear and observable and manufacturers make investments in process improvements to reduce their production costs we find that the optimal channel structure decision depends on interactions between two parameters the degree of substitutability between products and the level of investments required to achieve production cost reduction these parameters represent what have been widely interpreted in the management literature as the two primary generic strategies that most organizations follow in order to gain competitive advantage cost leadership and product differentiation porter 1980 thus our analysis brings out the strategic and interdisciplinary nature of the channel structure decision that can significantly affect firm profitability our main results are as follows first we find that decentralized noncoordinated channels appear as more profitable equilibrium than integration or perfectly coordinated channels at high product substitutability even when process innovation dimension is accounted for in agreement with the literature however the range of substitutability over which decentralization is an equilibrium strategy is smaller the easier it is to reduce production costs intuitively the easier the cost reduction the larger the cost penalty that the channel incurs as a result of not coordinating investment and pricing decisions between channel members and thus smaller the range over which decentralization is an equilibrium this implies that there is an explicit tradeoff between efficiency and strategic incentives in distribution channel design second we show that decentralized manufacturers invest less in process innovation than integrated manufacturers do regardless of the structure of the competing channel and the degree of substitutability between products consequently a decentralized channel has higher costs charges higher prices and produces lower quantities than an integrated channel does moreover these differences get larger the easier the cost reduction the effect on manufacturer profits however is not that clear manufacturers make higher profits by decentralizing if products are highly substitutable inagreement with mcguire and staelin 1983 and coughlan and wernerfelt 1989 however we also find that the relative profitability of decentralization at high substitutability and of integration at low substitutability increases the easier the cost reduction moreover the range of substitutability over which decentralization is more profitable than integration is itself larger the easier the cost reduction though decentralization is an equilibrium strategy over a smallerrange thus process innovation accentuates the profit difference between integrated and decentralized channels andmakes the prisoner s dilemma situation worse in the choice of distribution channel structure finally we analyze two examples of coordinated decision making in a channel a divisional integrated system and franchising in the first case we find that decentralization can emerge as a unique and more profitable equilibrium at high product substitutability in contrast to mcguire and staelin 1983 in the second case we find that decentralization is not always a unique equilibrium and it is not always more profitable than integration in sharp contrast to the results by coughlan and wernerfelt 1989 thus franchising does not provide a sure way of achieving channel coordination when marginal production costs are not constant in sum this paper highlights the importance of simultaneously considering both the horizontal and the vertical dimensions of interorganizational relations on one hand and on the other paying attention to cross functional interactions across marketing and operational decisions to better understand the underlying incentives that shape firm and market structures conventional focus of marketing on demand side effects and of operations on cost side effects can lead to suboptimal decisions

the rigidity of prices this paper uses evidence on individual transaction prices to analyze price behavior the evidence shows that for many transactions pricesremain rigid for periods exceeding one year the rigidity of price ispositively correlated with industry concentration for several productsthe correlation of price changes across buyers is low the paper alsoinvestigates the relationship between price rigidity price change andthe length of time a buyer and seller have been doing business together the author interprets the evidence as emphasizing the importance of nonprice rationing and the inadequacy of models in whichprice movements alone clear markets copyright 1986 by american economic association

markets ready mixed concrete concrete s natural color is gray its favored uses are utilitarian its very ubiquity causes it to blend into the background but ready mix concrete does have one remarkable characteristic other than manufactured ice perhaps no other manufacturing industry faces greater transport barriers the transportation problem arises because ready mix concrete both has a low value to weight ratio and is highly perishable it absolutely must be discharged from the truck before it hardens these transportation barriers mean ready mixed concrete must be produced near its customers for the same reason foreign trade in ready mixed concrete is essentially nonexistent this article is an introduction to the basics of the market for ready mix concrete focusing mainly on its consumers and its producers in the united states but with occasional comparisons to other countries when contrasts are useful

derivatives holdings and market values of u s bank holding companies abstractwe examine the impact of derivatives held by us bank holding companies on their market valuations over the period 2000 to 2010 by using bank level data with detailed information on the notional amounts of derivative positions according to holding purposes and underlying asset types our regression analyses provide three main findings first derivative instruments held for hedging rather than trading purposes contribute to enhancing market values second the positive effects exhibit nonmonotonic patterns indicating that excessive amounts of derivatives holdings deteriorate market values third interest rate derivatives are the main source of high valuations

equilibrium structures in vertical oligopoly abstract the central purpose of this paper is to examine vertical integration as an equilibrium phenomenon we model it as integration between cournot oligopolists in both the upstream and the downstream stages we consider the issue of private profitability versus collective profitability and show that under several situations the equilibrium outcomes may result in a prisoner s dilemma the analysis is extended to consider equilibrium outcomes in a dynamic setting where we find no integration to be a relatively common outcome

the political economy of low inflation what are the politics of inflation this question is usually raised solely when inflation rates are high all levels of inflation however high and low are the outcome of political conflicts but no current approach to the study of inflation sociological neoclassical modern political economy adequately captures the full range of political issues at stake and this leads to problems for both theory and policy this paper critiques the existing perspectives on inflation and then focuses on three theoretical issues raised by those critiques the economic costs of inflation the concept of monetary neutrality from economic and political perspectives and the importance of disaggregating economic growth statistics finally the paper introduces and explores a contending approach to the analysis of the political economy of inflation a micro politics perspective this approach is the only one to address the politics of low inflation which is of great significance for contemporary political economy copyright 2001 by blackwell publishers ltd

network models of spatial oligopoly with an application to deregulation of electricity generation because of the existence of transmission costs and significant scale economies in power production deregulation of electricity generation would lead to spatial oligopolistic markets this paper uses linear programs to obtain short run spatial price equilibria for a deregulated bulk power market in upstate new york these models unlike most previous models of imperfect competition capture spatial variations in production costs and demand functions we present two models one calculates a nash bertrand equilibrium in which each firm believes that rivals will not react to price changes this equilibrium represents the most intense level of competition to be expected the other model yields limit prices that are designed to discourage new firms from entering the market

where to locate in a circular city abstract we study the location choices by cournot oligopolists in a circular market where consumers are located uniformly along the circumference we analyze the subgame perfect nash equilibria spne of a two stage location quantity game we demonstrate that the equidistant location pattern is only one of the many equilibrium location patterns that arise in a circular market nonequidistant multiple or a continuum of location equilibria may also arise both spatial agglomeration and dispersion or a combination of agglomeration and dispersion may occur in equilibrium in the case of infinitely many location equilibria we establish the welfare equivalence of the equilibrium location patterns

mill pricing versus spatial price discrimination under bertrand and cournot spatial competition this paper asks two questions about spatial competition first does spatial price discrimination lead to lower prices and higher welfare than mill pricing if firms hold the bertrand conjecture the answer is yes for most values of fixed cost but for the cournot conjecture the opposite is true second does the introduction of space into the oligopoly models of bertrand and cournot change their results the answer is generally no however spatial bertrand prices exceed marginal cost unlike their spaceless counterparts these answers are obtained using models of spatial competition of which the cournot mill pricing models are new in spatial competition significant transport costs and economies of scale bestow market power upon firms this paper addresses two questions about spatial competition first does spatial price discrimination yield lower prices and higher social welfare producer plus consumer surplus than fo b mill pricing under spatial price discrimination differences in the delivered prices charged by a firm bear no necessary relationship to differences in transport costs in contrast a mill pricing firm sets a single price at its plant and customers bear the cost of transport this paper answers this question for the cases in which firms adopt the bertrand or cournot conjectures concerning how rivals will react to price and output changes this question is important because of the superficial appeal of mill pricing which stems from its imitation of the spatial structure of marginal costs the presence of spatial price discrimination by contrast is often considered to be evidence of the presence of market power at least in part for these reasons the us robinson patman antitrust act and great britain s price commission favor mill pricing nevertheless spatial price discrimination remains ubiquitous in the us europe and japan greenhut 1981 the second question is how does the introduction of space into the original oligopoly models of cournot and bertrand change their results cournot

divisionalization and strategic managerial incentives in oligopoly under uncertainty abstract this paper argues that divisionalization and incentive contracting are complementary rent shifting tools in the presence of demand uncertainty the role for divisionalization arises if managers know the state of demand prior to making output decisions and if incentive contracts are linear and non state contingent in this context incentive contracts achieve expected stackelberg outcomes but have no impact on the firm s responsiveness to demand shocks divisionalization on the other hand has the strategically beneficial effect of making the firm more responsive to demand shocks

the dampening of competition effect of exclusive dealing using the dampening of competition approach to understanding vertical relationships this paper shows that in the absence of intrabrand retailer competition firms earn greater profits using exclusive dealing the paper explains the frequent simultaneous appearance of exclusive dealing and exclusive territoriality the results are used to analyze the famous 1949 standard stations case the author concludes that the 1949 court did the right thing for a wrong reason copyright 1990 by blackwell publishing ltd

mixed oligopoly and spatial agglomeration abstract we investigate a mixed market where a state owned welfare maximizing public firm competes against profit maximizing private firms we use a circular city model with quantity setting competition in contrast to a pure market case discussed by pal 1998a spatial agglomeration of private firms always appears in equilibrium all private firms locate at the same point and the public firm locates at the opposite side we also find that this equilibrium pattern of the location is second best provided that output of each private firm cannot be controlled by the social planner jel classification h42 l13 oligopole mixte et agglomeration spatiale les auteurs examinent un marche mixte ou une entreprise publique possedee par l etat et cherchant a maximiser le niveau de bien etre est en concurrence avec des entreprises privees qui cherchent a maximiser leurs profits on utilise un modele de cite circulaire ou la concurrence se fait en choisissant la quantite produite en contraste avec le cas du marche parfait discute par pal 1998a l agglomeration spatiale des entreprises privees parait etre en equilibre toutes les entreprises privees se localisent au meme point et l entreprise publique se localise du cote oppose il appert que ce pattern d equilibre de localisation est un equilibre de second ordre compte tenu du fait que la production de chaque entreprise privee ne peut etre controlee par le planificateur social