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Löschian competition under demand uncertainty

Author

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  • Biing‐Shiunn Yang
  • Chao‐Cheng Mai

Abstract

This purpose of this paper is twofold: First, we are interested in making a first step towards formally introducing demand uncertainty into the standard model of Löschian competition. Secondly, we wish to explore the effects of demand uncertainty on both the nature of the solution and comparative statics relating to the equilibrium price and market area. Several striking results are derived and then compared with those derived by Capozza and Van Order (1978), Benson (1980), Appelbaum and Katz (1986) and Ishii (1991). Resumen El propósito de este artículo es doble: Primero, nos interesa dar el primer paso hacia presentar formalmente la incertidumbre de la demanda dentro del modelo estándar de competencia de Lösch. Segundo, queremos explorar los efectos de la incertidumbre de la demanda tanto en la naturaleza de la solución como en estática comparativa relacionada con el precio de equilibrio y el área de mercado. Se obtienen varios resultados sorprendentes los cuales se comparan a continuación con los obtenidos por Capozza y Van Order (1978), Benson (1980), Appelbaum y Katz (1986) e Ishii (1991).

Suggested Citation

  • Biing‐Shiunn Yang & Chao‐Cheng Mai, 2009. "Löschian competition under demand uncertainty," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 765-784, November.
  • Handle: RePEc:bla:presci:v:88:y:2009:i:4:p:765-784
    DOI: 10.1111/j.1435-5957.2009.00235.x
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    References listed on IDEAS

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