Spatial Competition and the Core
Hotelling's two-stage game in which firms first choose prices and then choose locations does not have a Nash equilibrium in pure strategies. This paper proposes a new model of the price subgame that ensures existence of an equilibrium in pure strategies. At the price formation stage, firms must select prices which support an allocation in the core of the market game, given firms' locations. This modelling captures the notion that consumers may seek discounts from competing merchants. Two models are solved. In one, firms observe consumer locations; in the other they cannot. For both models, the equilibrium locations for firms are the first and third quartiles. Thus, the firms minimize total transports costs. However, the resulting price schedules differ greatly.
- Location-allocation on a line with demand-dependent costs
- Ex-post price stability with convex costs
- On price competition in location-price models with spatially separated makets
- Spatial competition with an outside good and distributed reservation prices.
- Stationary and nonstationary strategies in Hotelling's model of spatial competition with repeated pricing decisions
- Competition in the traditional sector does not matter for the `core-periphery' model
- Spatial competition on 2-dimensional markets and networks when consumers don't always go to the closest firm
- Customization competition between branded firms: continuous extension of product line from core product
- Spatial competition between shopping centers
- Local market structure in a Hotelling town
- Externality in a Stackelberg spatial competition model
- ATM pricing and location games in the retail banking industry
- Secure strategy equilibrium in Hotelling's model of spatial competition
- Competition of Firms: Discriminatory Pricing and Location
- Noncooperative Bargaining and Spatial Competition
- Spatial Competition with a Land Market: Hotelling and Von Thunen Unified
- Competitive Spatial Price Discrimination with Capacity Constraints
- Hotelling competition with discrete consumers
- Efficient spatial competition
- Hotelling bound: pricing and location with reservation prices
- A theoretical foundation for the undercut-proof equilibrium
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