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Competition in multiple characteristics: An empirical test of location equilibrium

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  • Elizalde, Javier

Abstract

With products differentiated in multiple dimensions, the location equilibrium for a duopolistic market exhibits maximum differentiation in one dimension and minimum differentiation in all the other dimensions. This paper analyses whether this equilibrium arises using real data for the Spanish movie theatre exhibition market where the firms (cinemas) are differentiated along two main dimensions (their geographical location and the set of movies exhibited). Data not only shows a trade-off, in that closer theatres tend to choose a higher proportion of different movies, but also that there is a tendency towards either max–min or min–max product differentiation.

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  • Elizalde, Javier, 2013. "Competition in multiple characteristics: An empirical test of location equilibrium," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 938-950.
  • Handle: RePEc:eee:regeco:v:43:y:2013:i:6:p:938-950 DOI: 10.1016/j.regsciurbeco.2013.09.007
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    Cited by:

    1. Bernardo, Valeria & Borrell, Joan-Ramon & Perdiguero, Jordi, 2016. "Fast charging stations: Simulating entry and location in a game of strategic interaction," Energy Economics, Elsevier, vol. 60(C), pages 293-305.
    2. repec:eee:regeco:v:64:y:2017:i:c:p:117-136 is not listed on IDEAS
    3. Aurélie Bonein & Stéphane Turolla, 2017. "Spatial competition with demand uncertainty: A laboratory experiment," Working Papers SMART - LERECO 17-12, INRA UMR SMART-LERECO.
    4. Schuetz, Jenny, 2015. "Why are Walmart and Target Next-Door neighbors?," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 38-48.

    More about this item

    Keywords

    Spatial competition; Location; Price; Product differentiation; Multiple dimensions; Equilibrium;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other

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