Hotelling's "Ice cream dealers" with elastic demand
This article reconsiders the Hotelling duopoly model of 1929, but under elastic demand, more precisely a linear demand function. The equilibrium state for identical firms is fully described, and the intervals of different regimes: independent monopolies, genuine duopoly competition, and price cutting wars, are specified in terms of one single compound parameter (maximum price, minus marginal production cost, divided by transportation cost).
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Volume (Year): 36 (2002)
Issue (Month): 1 ()
|Note:||Received: October 2000/Accepted: August 2001|
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