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Multi-Store Competition: Market Segmentation or Interlacing?

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Author Info
Maarten C.W. Janssen () (Dept of Micro-Economics, Erasmus University Rotterdam)
Vladimir A. Karamychev () (Dept of Information Science, Erasmus University Rotterdam)
Peran van Reeven () (Dept of Regional, Port and Transport Economics, Erasmus University Rotterdam)
Abstract

This paper develops a model for multi-store competition between firms. Using the fact that different firms have different outlets and produce horizontally differentiated goods, we obtain a pure strategy equilibrium where firms choose a different location for each outlet and firms' locations are interlaced. Moreover, generically, the subgame perfect equilibrium is unique and when the firms have an equal number of outlets, prices are independent of the number of outlets.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 03-033/1.

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Date of creation: 10 Apr 2003
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Handle: RePEc:dgr:uvatin:20030033

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Related research
Keywords: multi-store competition hotelling interlacing

Find related papers by JEL classification:
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
D10 - Microeconomics - - Household Behavior - - - General
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Maria Cancian & Angela Bills & Ted Bergstrom, 1995. "Hotelling Location Problems with Directional Constraints: An Application to Television News Scheduling," University of California at Santa Barbara, Economics Working Paper Series 1995C, Department of Economics, UC Santa Barbara. [Downloadable!]
    Other versions:
  2. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-50, September. [Downloadable!] (restricted)
  3. Tore Nilssen & Lars Sørgard, 1998. "Time Schedule and Program Profile: TV News in Norway and Denmark," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 7(2), pages 209-235, 06. [Downloadable!] (restricted)
  4. Lai, Fu-Chuan, 2001. "Sequential locations in directional markets," Regional Science and Urban Economics, Elsevier, vol. 31(5), pages 535-546, September. [Downloadable!] (restricted)
  5. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring. [Downloadable!] (restricted)
  6. Nilssen, Tore, 1997. "Sequential location when transportation costs are asymmetric," Economics Letters, Elsevier, vol. 54(2), pages 191-201, February. [Downloadable!] (restricted)
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  7. Irmen, Andreas & Thisse, Jacques-Francois, 1998. "Competition in Multi-characteristics Spaces: Hotelling Was Almost Right," Journal of Economic Theory, Elsevier, vol. 78(1), pages 76-102, January. [Downloadable!] (restricted)
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  8. Brander, James A & Eaton, Jonathan, 1984. "Product Line Rivalry," American Economic Review, American Economic Association, vol. 74(3), pages 323-34, June. [Downloadable!] (restricted)
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  9. Klemperer, Paul, 1992. "Equilibrium Product Lines: Competing Head-to-Head May Be Less Competitive," American Economic Review, American Economic Association, vol. 82(4), pages 740-55, September. [Downloadable!] (restricted)
  10. Martinez-Giralt, Xavier & Neven, Damien J, 1988. "Can Price Competition Dominate Market Segmentation?," Journal of Industrial Economics, Blackwell Publishing, vol. 36(4), pages 431-42, June. [Downloadable!] (restricted)
  11. Tabuchi, Takatoshi, 1994. "Two-stage two-dimensional spatial competition between two firms," Regional Science and Urban Economics, Elsevier, vol. 24(2), pages 207-227, April. [Downloadable!] (restricted)
  12. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February. [Downloadable!] (restricted)
  13. Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March. [Downloadable!] (restricted)
  14. de Palma, A, et al, 1985. "The Principle of Minimum Differentiation Holds under Sufficient Heterogeneity," Econometrica, Econometric Society, vol. 53(4), pages 767-81, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Simon Loertscher & Yves Schneider, 2005. "Switching Costs, Firm Size, and Market Structure," Diskussionsschriften dp0515, Universitaet Bern, Departement Volkswirtschaft. [Downloadable!]
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