Optimal zoning in the unconstrained Hotelling game1. (18th July 2014)

• Record Type: Journal Article
• Authors: Bárcena‐Ruiz, Juan Carlos; Casado‐Izaga, F. Javier; Hamoudi, Hamid; Rodriguez, Isabel
• Is Part Of: Papers in regional science. Volume 95:Number 2(2016:Jun.)
• Page Start: 427
• Page End: 435
• Publication Date: 2014-07-18
• Subjects: L13 -- R38; Zoning -- regulation -- firms' locations; Regional planning -- Periodicals; City planning -- Periodicals; Urbanization -- Periodicals; Economic geography -- Periodicals; 307.12
• DOI: 10.1111/pirs.12132
• Languages: English
• ISSNs: 1056-8190

Abstract

Abstract: This paper studies a zoning mechanism that gives the optimal locations of two firms in a linear city under mill prices. A regulator biased towards consumers allows a central area of the city to be shared by firms and consumers and thus firms are not allowed to locate outside the city limits. A regulator more concerned about firms extends this central zone outside the city limits and the city has a residential use only if the firms so decide. Finally, a regulator highly biased towards firms allows them to locate only beyond a set distance from the city, so there is a strip of land outside the city but close to its boundaries, for alternative uses.