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AbstractModels of firms' location in new markets, and certain repeated games have the feature that players must make location decisions (either in geographical space or in product-characteristics space) in an uncertain environment and without the precise knowledge of where other entrants will locate. This article presents a noncooperative equilibrium in which entrants locate rationally in the light of information available to them. This equilibrium is similar in spirit to the type of equilibrium used in the auction literature by Wilson (1977), Matthews (1979), and Holt (1979). The main difference is that in the location game players are not in a win-or-lose situation, but rather they have a chance of obtaining a market share anywhere between zero and one.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 12 (1981)
Issue (Month): 2 (Autumn)
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Web page: http://www.rje.org
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- Meagher, Kieron J. & Zauner, Klaus G., 2004. "Product differentiation and location decisions under demand uncertainty," Journal of Economic Theory, Elsevier, vol. 117(2), pages 201-216, August.
- Aurélie Bonein & Stéphane Turolla, 2007.
"Sequential Location under one-sided Demand Uncertainty,"
07-12, LAMETA, Universtiy of Montpellier, revised Nov 2007.
- Bonein, Aurélie & Turolla, Stéphane, 2009. "Sequential location under one-sided demand uncertainty," Research in Economics, Elsevier, vol. 63(3), pages 145-159, September.
- Hurkens, Sjaak & Vulkan, Nir, 2003.
"Free entry does not imply zero profits,"
Elsevier, vol. 81(3), pages 285-290, December.
- Hiroshi Aiura, 2010. "“Signal-jamming” leads to “minimum differentiation” under demand uncertainty," The Annals of Regional Science, Springer, vol. 45(2), pages 245-271, October.
- F. Javier Casado-Izaga, 2000. "Location decisions: The role of uncertainty about consumer tastes," Journal of Economics, Springer, vol. 71(1), pages 31-46, February.
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