A synthesis of location models
AbstractThis article considers a model of spatial competition where firms and consumers are located in a semicircular space rather than in the whole circle (Salop's model) or the linear city (Hotelling's model), under the assumptions of both, convex and concave, transportation costs. The paper tries to generalize the results of the two previous models. We find that for concave transportation costs the existence of a price equilibrium is warranted for every firms' location when the length of the semicircular space is greater than 3/4. For the convex case, perfect equilibrium is only obtained when the size of the market segment is equivalent to Hotelling's linear model.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 3 (2007)
Issue (Month): 30 ()
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Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D4 - Microeconomics - - Market Structure and Pricing
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- de Frutos, M. A. & Hamoudi, H. & Jarque, X., 1999.
"Equilibrium existence in the circle model with linear quadratic transport cost,"
Regional Science and Urban Economics,
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- Frutos, María Ángeles de & Hamoudi, H. & Jarque, X., . "Equilibrium existence in the circle model with linear quadratic transport cost," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/4281, Universidad Carlos III de Madrid.
- Hamid Hamoudi & María J. Moral, 2005. "Equilibrium existence in the linear model: Concave versus convex transportation costs," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 201-219, 06.
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"On the nature of competition with differentiated products,"
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-685, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Frutos, María Ángeles de & Hamoudi, H. & Jarque, X., .
"Spatial competition with concave transport costs,"
Open Access publications from Universidad Carlos III de Madrid
info:hdl:10016/4302, Universidad Carlos III de Madrid.
- repec:ner:louvai:info:hdl:2078.1/54799 is not listed on IDEAS
- d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979.
"On Hotelling's "Stability in Competition","
Econometric Society, vol. 47(5), pages 1145-50, September.
- Economides, Nicholas, 1986. "Minimal and maximal product differentiation in Hotelling's duopoly," Economics Letters, Elsevier, vol. 21(1), pages 67-71.
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