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- The Circular Road Revisited: Uniqueness And Supermodularity

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  • Martin Peitz

    (Universidad de Alicante)

Abstract

The model of the circular road has proved to be a popular model of oligopolistic interaction, yet its theoretical properties are not fully explored. In this paper I extend the uniqueness result of price equilibrium in the circular road with equidistant locations from quadratic transportation costs to a class of utility functions of the consumers. I show that the associated game is supermodular and dominance solvable. The paper also discusses possible extensions and limitations of the model.

Suggested Citation

  • Martin Peitz, 1999. "- The Circular Road Revisited: Uniqueness And Supermodularity," Working Papers. Serie AD 1999-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:1999-06
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-1999-06.pdf
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    References listed on IDEAS

    as
    1. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    2. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    3. Economides, Nicholas, 1986. "Minimal and maximal product differentiation in Hotelling's duopoly," Economics Letters, Elsevier, vol. 21(1), pages 67-71.
    4. Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January.
    5. Vives, Xavier, 1990. "Nash equilibrium with strategic complementarities," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 305-321.
    6. Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. de Frutos, M. A. & Hamoudi, H. & Jarque, X., 2002. "Spatial competition with concave transport costs," Regional Science and Urban Economics, Elsevier, vol. 32(4), pages 531-540, July.

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