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Hotelling's "Ice cream dealers" with elastic demand

Author

Listed:
  • Tönu Puu

    (Department of Economics, Umeå University, SE-90187 Umeå, Sweden)

Abstract

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).

Suggested Citation

  • Tönu Puu, 2002. "Hotelling's "Ice cream dealers" with elastic demand," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(1), pages 1-17.
    • Handle: RePEc:spr:anresc:v:36:y:2002:i:1:p:1-17
    Note: Received: October 2000/Accepted: August 2001
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    Citations

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    Cited by:

    1. Takanori Ago, 2023. "Utility function and location in the Hotelling game," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-9, December.
    2. Stewart, Hayden & Blisard, Noel, 2006. "Household versus Community Effects: Who Really Pays More for Food?," 2006 Annual meeting, July 23-26, Long Beach, CA 21053, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Gallay, Olivier & Hongler, Max-Olivier, 2008. "Market sharing dynamics between two service providers," European Journal of Operational Research, Elsevier, vol. 190(1), pages 241-254, October.
    4. Adriaan Hendrik van der Weijde & Erik T. Verhoef & Vincent A. C. van den Berg, 2012. "Hotelling Models with Price-Sensitive Demand and Asymmetric Transport Costs: An Application to Public Transport Scheduling," Tinbergen Institute Discussion Papers 12-119/VIII, Tinbergen Institute.
    5. Rasch, Alexander & Herre, Jesko, 2013. "Customer-side transparency, elastic demand, and tacit collusion under differentiation," Information Economics and Policy, Elsevier, vol. 25(1), pages 51-59.

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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