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Equilibrium Locations in the Unconstrained Hotelling Game

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  • L. Lambertini

Abstract

In this paper, we try to analyse the optimal location choice in a standard game of horizontal differentiation in which firms are free to locate outside the city boundaries. It turns out that the unique Nash equilibium exhibits a finite distance between the sellers, so that the maximum differentiation principle is not confirmed. Moreover, the two symmetric Stackelberg equilibria exhibit the same degree of differentiation observed when the game is non cooperatively played within the city, except that the leader locates at the center.

Suggested Citation

  • L. Lambertini, 1993. "Equilibrium Locations in the Unconstrained Hotelling Game," Working Papers 155, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:155
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    Cited by:

    1. Takanori Ago, 2023. "Utility function and location in the Hotelling game," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-9, December.
    2. Tabuchi, Takatoshi & Thisse, Jacques-Francois, 1995. "Asymmetric equilibria in spatial competition," International Journal of Industrial Organization, Elsevier, vol. 13(2), pages 213-227.
    3. Hamid Hamoudi & Carmen Avilés-Palacios, 2022. "Awareness Campaigns in a Horizontally Differentiated Market with Environmentally Conscious Consumers, Private Versus Public Duopoly," IJERPH, MDPI, vol. 19(19), pages 1-21, October.

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