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Hotelling's Location Model in Mixed Duopoly

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  • Yuanzhu Lu

    (Department of Economics, National University of Singapore)

Abstract

We investigate a mixed duopoly market where a welfare-maximizing public firm competes against a profit-maximizing private firm, using a linear-city location-then-price model with linear transportation costs. We find that, compared with the results in the purely private duopoly case discussed by Hotelling (1929) and d' Aspremont, Gabszewicz, and Thisse (1979), the condition under which price equilibrium exists for every location of private firm and public firm is changed while the main result of no subgame perfect Nash equilibrium (SPNE) for the game still holds true.

Suggested Citation

  • Yuanzhu Lu, 2006. "Hotelling's Location Model in Mixed Duopoly," Economics Bulletin, AccessEcon, vol. 8(1), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-06h40003
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    File URL: http://www.accessecon.com/pubs/EB/2006/Volume8/EB-06H40003A.pdf
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    References listed on IDEAS

    as
    1. Toshihiro Matsumura & Noriaki Matsushima, 2003. "Mixed Duopoly with Product Differentiation: Sequential Choice of Location," Australian Economic Papers, Wiley Blackwell, vol. 42(1), pages 18-34, March.
    2. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991. "Mixed oligopoly with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 43-53, March.
    3. de Fraja, Giovanni & Delbono, Flavio, 1990. "Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
    4. Fjell, Kenneth & Heywood, John S., 2004. "Mixed oligopoly, subsidization and the order of firm's moves: the relevance of privatization," Economics Letters, Elsevier, vol. 83(3), pages 411-416, June.
    5. Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
    6. Lorenz NETT, 1993. "Mixed Oligopoly With Homogeneous Goods," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 64(3), pages 367-393, July.
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    Cited by:

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    2. Jorge Fernández-Ruiz, 2020. "Mixed duopoly in a Hotelling framework with cubic transportation costs," Letters in Spatial and Resource Sciences, Springer, vol. 13(2), pages 133-149, August.
    3. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2017. "Spatial Price Discrimination and Privatization on Vertically Related Markets," MPRA Paper 76964, University Library of Munich, Germany.
    4. repec:ebl:ecbull:v:18:y:2007:i:2:p:1-11 is not listed on IDEAS
    5. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2015. "A Unified Model of Spatial Price Discrimination," MPRA Paper 66557, University Library of Munich, Germany.
    6. Yasuo Sanjo, 2007. "Hotelling's Location Model with Quality Choice in Mixed Duopoly," Economics Bulletin, AccessEcon, vol. 18(2), pages 1-11.
    7. Yasuo Sanjo, 2009. "Bertrand Competition In A Mixed Duopoly Market," Manchester School, University of Manchester, vol. 77(3), pages 373-397, June.
    8. Xu, Lili & Matsumura, Toshihiro, 2023. "Market transparency in a mixed oligopoly," MPRA Paper 118415, University Library of Munich, Germany.

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    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods

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