Horizontally Differentiated Market Makers
"I analyze a model of competition between two market makers who are located at the opposite ends of the Hotelling line, both of which are also occupied by a search market. Buyers and sellers are uniformly distributed between the two market places, yet can only trade at one of them. In equilibrium, market makers net a positive profit and trade with buyers and sellers close to them, while buyers and sellers further away participate in search markets. Interestingly, a duopolistic market maker nets a larger profit than a monopoly because search markets make the quantities market makers trade strategic complements." Copyright 2007, The Author(s) Journal Compilation (c) 2007 Blackwell Publishing.
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Volume (Year): 16 (2007)
Issue (Month): 4 (December)
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- repec:rus:hseeco:72158 is not listed on IDEAS
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