Instability in Non-Price Spatial Competition

8 Pages Posted: 14 Dec 2011 Last revised: 23 Dec 2011

See all articles by Yosuke Yasuda

Yosuke Yasuda

Osaka University - Graduate School of Economics

Date Written: December 22, 2011

Abstract

The note analyzes a slightly modified Hotelling model in which two firms, by paying costs, are allowed to choose multiple store locations. We characterize the condition under which agglomeration occurs, and show that the principle of minimum differentiation never holds when the set up cost of additional store is constant or decreasing in the number of each firm's total stores.

Keywords: Hotelling model, multiple locations, spatial competition

JEL Classification: C72, D43, L13

Suggested Citation

Yasuda, Yosuke, Instability in Non-Price Spatial Competition (December 22, 2011). Available at SSRN: https://ssrn.com/abstract=1972046 or http://dx.doi.org/10.2139/ssrn.1972046

Yosuke Yasuda (Contact Author)

Osaka University - Graduate School of Economics ( email )

1-7 Machikaneyama
Toyonaka, Osaka, 560-0043
Japan

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