• Table of Contents
    • Abstract
    • Keywords
    • Article
      • Spatial competition between firms
        • Product differentiation and collusion
        • Search
      • The relationship with new economic geography
      • Spatial competition and urban economics
        • Public facilities
        • Local labour markets
    • See Also
    • Bibliography
    • How to cite this article

location theory

Jacques-François Thisse
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

Location theory deals with what is where. ‘What’ refers to any possible type of economic activity involving stores, dwellings, plants, offices, or public facilities. ‘Where’ refers to areas such as regions, cities, political jurisdictions, or custom unions. The objective of location theory is to explain why particular economic activities choose to establish themselves in particular places. Here we focus on spatial competition theory between firms, where locations are subject to attracting and repelling forces. We then extend this framework in order to account for the residential choices made by consumers.
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How to cite this article

Thisse, Jacques-François. "location theory." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 31 July 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_L000213> doi:10.1057/9780230226203.0988

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