Abstract
This paper investigates spatial Cournot competition in a circular city, where the maximal service range of a vehicle is less than half of the perimeter, and a firm needs to initiate more than two dispatches to serve the whole market. We examine a multi-stage game of location and transportation mode choices, and the subsequent quantity competition between duopoly firms. The findings reveal that non-maximum dispersion is the unique location equilibrium when duopoly firms deliver products in different transportation modes or when the transportation mode decisions are made endogenously and the fixed cost of a transportation instrument is relatively high.
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