Analytical solution of a multi-dimensional Hotelling model with quadratic transportation costs
We present an analytical solution to the two-dimensional two-stage Hotelling model with quadratic transportation costs. We assume that consumers' choice is tempered by a logit function, which characterizes consumers' heterogeneity. As in the one-dimensional case, stores aggregate spatially when consumers' heterogeneity is strong enough. When it decreases, we show that stores differentiate in only one dimension. The analytical solution allows us to give a precise interpretation of this effect through the comparison of consumers' elasticity under differentiation along one or two characteristics. Finally, we extend our results to a hypercube of any dimension.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Veendorp, E. C. H. & Majeed, Anjum, 1995. "Differentiation in a two-dimensional market," Regional Science and Urban Economics, Elsevier, vol. 25(1), pages 75-83, February.
- Hideo Konishi, 1999.
"Concentration of Competing Retail Stores,"
Boston College Working Papers in Economics
447, Boston College Department of Economics.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:39:y:2009:i:3:p:343-349. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.