Yeung-Nan Shieh

Location and the theory of production Clarifications and extensions

Abstract This paper has attempted to clarify some weaknesses and flaws contained in Miller and Jensens analysis. In particular, we have demonstrated that in Miller and Jensens model, if the production function is homogeneous of degree one and the transport rate functions are independent of quantities shipped, it is impossible to have an interior solution. In addition, we have evaluated the role of the generalized transport rate functions in the profit-maximization location model with and without a prescribed level of output and shown that if transport rates depend on quantities shipped and have constant elasticities, then a linearly homogeneous production function is not sufficient to insure that optimum location is independent of output or the demand function. This result clearly invalidates Miller and Jensens assertion.

Estimating Functional Forms in Cost-Prices

Abstract Klaus Conrad (1983) developed the cost-price approach, based upon the notion of partially fixed factor proportions, as an alternative to the traditional neoclassical method of modeling cost and production functions. He showed that a simplified version of his model could be used to estimate a Cobb-Douglas cost function in cost-prices. We have been able to estimate the full form of Conrads proposed model and extend his technique to the CES and generalized Leontief cost functions. We also illustrate how to model technical change in cost prices and in cost shares.

Dupuit, Spatial Economics and Optimal Resource Allocation: A French Tradition

This paper uncovers and develops nineteenth-century engineer Jules Dupuits pivotal role in the independent French tradition in spatial economic analysis. Dupuits invention of market area studies and (approximately first-degree) spatial price discrimination is illustrated with a simple mathematical model. Next, Dupuits conception of optimal toll structures and their relation to efficient transport systems, regulation, and economic welfare is analyzed and shown to contain a remarkably modern case for transport deregulation. The paper also assesses Dupuits role in the development of spatial economics and in the French contribution to the location paradigm in microeconomic analysis. Copyright 1986 by The Review of Economic Studies Limited.

Transport rates structure, optimum location, and theory of production: Reexamination

Abstract The two-stage approach consistently to present a generalized location theory of the firm in linear space is employed. It is shown that the second-order sufficient condition for the profit-maximizing and/or cost-minimizing location problem requires that transport rates increase with distance. In the process, it is demonstrated that this approach provides a compact way to analyze the location and production decisions separately and to avoid the errors made by Mathur and others.

An Early Use of Bid Rent Functions

This paper examines Launhardts contributions to the bid rent function and the patterns of land use. It shows that principles of bid rent analysis pioneered by Launhardt in 1885 have found application by later writers in urban and regional economics and economic geography apparently unfamiliar with his name and work. This indicates that Launhardts name deserves to be mentioned alongside those of Alonso, Dunn and Losch, as writers who have contributed substantially to the development of bid rent functions.

Full Price Competition and Dupuit's Defense of the Long-and-Short-Haul "Discrimination."

Condemnation of the long-and-short-haul discrimination has been nearly ubiquitous in the literature on economic theory and transportation. However, the French economist Dupuit developed a case against all transport regulation by relating it to a defense of the practice of “place discrimination” before the middle of the nineteenth century. He did so, moreover, within an early elaboration of a full price explanation of competitive functioning. This paper analyzes the idea in Dupuits context and argues that this so-called form of price “discrimination” is actually an efficient and necessary form of the competitive process.

LOCATION AND THE THEORY OF PRODUCTION UNDER MONOPSONY

This paper explicitly incorporates monopsony market structure into the Weber-Mosess one-output, two-input triangular location model and reexamines the location invariance principle. It will be shown that this principle need not hold if the imperfection of input markets prevails. This is contrary to the conventional wisdom.

Transportation rates, production and location in the Moses-Weber triangle: A note

Abstract This paper provides a simple way to examine the role of quantity discounted transportation rates on the independence between optimum location and the level of output within the context of the Weber–Moses triangular model. Utilizing our approach, we conclude that the propositions derived by Miller and Jensen, and Ziegler relating to the case of quantity discounted transportation rates are not sufficient to insure independence between optimum location and output. Specifically, we show that for the case of quantity discounted transportation rates the independence between output and optimum location crucially depends upon whether the elasticities of transportation rates with respect to quantity are constant and identical; and the ratio of marginal products is equal to the ratio of marginal transportation costs. These results are quite different from Miller and Jensens or Zieglers.

The beckmann-zipf effect and plant location under uniform pricing

Abstract This paper examines the impact of Beckmann-Zipf effect on location choice. Under the uniform price policy, it shows that the delivery cost minimization approach can not be applied, and the median location is unlikely to be chosen, even if the delivery cost function is linear.

Equilibrium production-location decisions under duopoly

Abstract This paper examines the equilibrium production-location decisions of a Cournot–Nash duopoly game. It shows that once the strategic effects stemming from duopolistic interactions are taken into account, the equilibrium of the one-stage game may deviate from that of the two-stage game, depending on not only the characteristics of each firms production function but also whether products are strategic substitutes or complements. It also shows that the impact of a symmetric change in market demand on location decisions of duopolistic firms may be different under the one-stage game and the two-stage game.