Nonprofit Firms in a Linear City

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Kamal Lamsal Christopher Hoag

Abstract

In a linear city model of firm location, firms have nonprofit objectivefunctions that consist of a linear combination of maximizing profits and producingoutput, although firms are constrained to earn nonnegative profits. If firms placesufficient weight on maximizing profits, then firms locate at the ends of the linear city,just as in the firm location game under profit maximization. If firms place sufficientweight on producing output, then firms will locate at the median of the linear city, justas in the candidate voting game. (L13, L31)

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