Spatial competition and equilibrium in a circular market
AbstractThe paper presents an analysis of spatial competition between two firms in a circular market. It is shown that the existence problem of a Bertrand-Nash- Equilibrium exists for the circular market in the same way as for the linear and bounded market. This is demonstrated by directly studying the reaction functions of the competing producers and without referring to merely technical fixed point arguments. The existence problem is solved by adding a move structure to the game, regarding market entry as sequential and taking place in historical time.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 609.
Date of creation: 1993
Date of revision:
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