Abstract
In this paper we calculate the consistent conjectural price variation on the basis of spatial competition models for alternative market shapes. It can be shown that these variation coefficients depend on the geographic size as well as on the shape of the market area. The use of consistent conjectural variation coefficients reveals two important results. On the one hand, we can show that Hotelling/Smithies competition allows a sufficient approximation to the consistent results, and on the other hand we demonstrate that hexagonal market areas create the highest welfare effects under consistent solutions.
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