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Asymmetric Spatial Competition

  • Sougata Poddar

    ()

    (Department of Economics, National University of Singapore)

  • Ruby Toh

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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File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0604.pdf
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Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0604.

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Length: 25 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:nus:nusewp:wp0604
Contact details of provider: Web page: http://www.fas.nus.edu.sg/ecs/index.html

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  1. Tabuchi, T. & Thisse, J.-F., . "Asymetric equilibria in spatial competition," CORE Discussion Papers RP -1151, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Lambertini, Luca, 1997. "Unicity of the equilibrium in the unconstrained Hotelling model," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 785-798, November.
  3. Anderson, Simon P, 1988. "Equilibrium Existence in the Linear Model of Spatial Competition," Economica, London School of Economics and Political Science, vol. 55(220), pages 479-91, November.
  4. GABSZEWICZ, Jean J. & THISSE, Jacques-François, . "On the nature of competition with differentiated products," CORE Discussion Papers RP -685, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. 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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