Extension of Spokes Model to Streets with Unequal Length Model (Explosion Model)

Articles in Press

Document Type : Research Paper

Authors

Faculty of Economics, Urmia University, Urmia, Iran

10.22059/ier.2023.275725.1006552

Abstract

Locating is one of the key elements in the success and survival of industrial centers and greatly affects cost reduction of the establishment and launching of various economic activities. This study has used the streets with unequal-length model through the classic extension of the Spoke model (Lijesen & Reggiani, 2013) but with an unlimited number of streets with uneven lengths. The results show that the spoke model is a special case of the streets with unequal-length model. According to the results of this study, if the strategy of enterprises and firms is to select both price and location, there would be no balance in the game. Furthermore, the increased length of streets leads to an increased profit of enterprises, while the enterprises choose locations far from the center (the maximum differentiation) with the increased number of streets, consequently decreasing the enterprises' output. Moreover, the enterprise production rate will incline toward zero when the number of streets goes to infinity, and a complete competition outcome will be achieved.

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Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 04 December 2023

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