Partial Agglomeration or Dispersion in Spatial Cournot Competition

We revisit works by Pal and Matsushima, which, respectively, present different equilibrium locations. We consider nonlinear transport costs and show that Palʹs result (dispersion) is more robust than Matsushimaʹs (partial agglomeration). Palʹs result holds true for any transport cost function, while Matsushimaʹs does not hold under strong concavity or convexity of the transport cost function. If we consider sequential move of location, Palʹs result holds for any transport cost. On the other hand, Matsushimaʹs does not hold except for linear transport cost. We also discuss welfare and show that nonlinearity of the transport cost function yields rich welfare implications.