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Product Location with Foresight

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  • Timothy L. Sorenson

Abstract

Traditional location literature concludes that firms will optimally differentiate in order to alleviate a tendency toward competitive pricing. However, it has recently been shown that firms will minimally differentiate if they (correctly) anticipate an absence of price competition. This paper examines the relationship between product location and the sustainability of cooperative pricing, in horizontally and vertically differentiated markets. Further, it describes equilibrium locations when firms are able to choose their locations jointly and when they must choose independently.

Suggested Citation

  • Timothy L. Sorenson, 1998. "Product Location with Foresight," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(5), pages 557-567, October.
    • Handle: RePEc:kap:revind:v:13:y:1998:i:5:p:557-567
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    Cited by:

    1. Stefan Napel & Gunnar Oldehaver, 2011. "A dynamic perspective on minimum quality standards under Cournot competition," Journal of Regulatory Economics, Springer, vol. 39(1), pages 29-49, February.

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