Agent-Based Spatial Competition
Equilibrium in the Hotelling model of spatial competition is guaranteed if the distribution of consumers is log concave. In the real world, nothing guarantees such a log concave distribution however, rendering the analytical model unable to provide a primer as to what one might expect from empirical applications. We develop an agent-based model of spatial competition that is capable of reproducing the results of the analytical model and also provides meaningful results for some cases where the distribution of consumers is not log concave. Using numerous simulations, on randomly drawn distributions, we derive equilibrium locations and prices and test for uniqueness. Moreover, we check whether the relationships between characteristics of the distribution (e.g. concentration, skewness) and outcomes are consistent with the analytical model. Key-words: Hotelling, agent-based modelling, spatial competition
|Date of creation:||Oct 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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).
- Caplin, A. & Nalebuff, B., 1989.
"Aggregation And Imperfect Competition: On The Existence Of Equilibrium,"
1989_30, Columbia University, Department of Economics.
- Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January.
- Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Cowles Foundation Discussion Papers 937, Cowles Foundation for Research in Economics, Yale University.
- Neven, Damien J., 1986.
"On Hotelling's competition with non-uniform customer distributions,"
Elsevier, vol. 21(2), pages 121-126.
- Neven, D., 1985. "On hotelling’s competition with non uniform customer distributions," CORE Discussion Papers 1985044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- repec:dgr:vuarem:2010-6 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa12p156. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.