Subsidy Competition in Networks

  • Authors:
  • H. A. Eiselt

  • Affiliations:
  • University of New Brunswick, Fredericton, NB, Canada

  • Venue:
  • Computational & Mathematical Organization Theory
  • Year:
  • 2000

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Abstract

This paper investigates a competitivelocation model on a network with free entry and exit. The givennetwork consists of regions that represent independent jurisdictions.Market entry and exit are sequential. In each stage of themulti-stage game, the regions simultaneously decide what subsidy tooffer to a firm should it located within its boundaries. The paperdelineates three distinct classes of subsidy policies and examinestheir effects in a series of computational tests.