Sequential Location Contests in the Presence of Agglomeration Economies

  title={Sequential Location Contests in the Presence of Agglomeration Economies},
  author={Laurent Martin},
This paper models the competition among jurisdictions for two firms in the same industry as a sequential auction. Before choosing a site, the firms solicit fiscal incentives from jurisdictions. In the presence of agglomeration economies, winning the first location contest makes a region more attractive for subsequent firms. The first firm receives a higher recruitment subsidy and the second firm a lower one than in the absence of positive interfirm externalities. Moreover, the complementarity… CONTINUE READING


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