Asymmetric Spatial Competition
This paper considers price and location decisions of competing duopolists through an approach that integrates the traditional inside location and outside location model. One firm locates inside a linear city along with consumers while the other locates outside it. We analyze a location-price simultaneous game as well as a location-then price sequential game and characterize the equilibria in pure strategies. The transport cost are assumed to be linear-quadratic and borne by the consumers. We find the results are contrasting to the traditional inside and outside location models and the stability of the proposed model is intermediate between the two.
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- Tabuchi, T. & Thisse, J.-F., "undated".
"Asymetric equilibria in spatial competition,"
CORE Discussion Papers RP
1151, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- GABSZEWICZ, Jean J. & THISSE, Jacques-François, "undated". "On the nature of competition with differentiated products," CORE Discussion Papers RP 685, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Anderson, S., 1986. "Equilibrium existence in the linear model of spatial competition," CORE Discussion Papers 1986013, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simon P. Anderson & Andre De Palma & Gap-Seon Hong, 1992. "Firm Mobility and Location Equilibrium," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 76-88, February.
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