Optimal Zoning in the Circular and Linear City under different Regulatory Approaches

Abstract

In this article we study zoning in a circular and linear city model where firms are not allowed to locate in certain areas. A biased regulator is then introduced in a Bertrand spatial Competition framework. We prove that city zoning depends on the regulator bias towards consumers or firms. Both city models show a formal equivalence in the results: a consumerbiased regulator pushes for strong competition whereas a firm-biased regulator induces weak competition