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Competition in multiple characteristics: An empirical test of location equilibrium

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  • Elizalde, Javier

Abstract

With products differentiated in multiple dimensions, the location equilibrium for a duopolistic market exhibits maximum differentiation in one dimension and minimum differentiation in all the other dimensions. This paper analyses whether this equilibrium arises using real data for the Spanish movie theatre exhibition market where the firms (cinemas) are differentiated along two main dimensions (their geographical location and the set of movies exhibited). Data not only shows a trade-off, in that closer theatres tend to choose a higher proportion of different movies, but also that there is a tendency towards either max–min or min–max product differentiation.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 43 (2013)
Issue (Month): 6 ()
Pages: 938-950

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Handle: RePEc:eee:regeco:v:43:y:2013:i:6:p:938-950

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: Spatial competition; Location; Price; Product differentiation; Multiple dimensions; Equilibrium;

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