Stability of spatial competition for a large number of firms on a bounded two-dimensional space
In this paper Hotelling's model of spatial competition is extended to a two-dimensional space, and it is shown that if the number of firms is very large, the configuration of the firms is stable in the inner area of a square region; this configuration is fairly similar to a socially optimal configuration. These results are almost contrary to Eaton and Lipsey's conjecture, and they are in marked contrast to the results of the one-dimensional model.
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