Competing over a Finite Number of Locations
Economic Theory Bulletin 4, 125–136.
14 Pages Posted: 25 Nov 2014 Last revised: 2 Jan 2018
Date Written: January 9, 2015
We consider a Hotelling location game where retailers can choose one of a finite number of locations. Consumers have strict preferences over the possible available store locations and retailers aim to attract the maximum number of consumers. We prove that a pure strategy equilibrium exists if the number of retailers is large enough. Moreover, as the number of retailers grows large, in equilibrium the distribution of retailers over the locations converges to the distribution of consumers' preferences.
Keywords: Hotelling games, pure equilibria, large games, political economy
JEL Classification: C72, R30, R39
Suggested Citation: Suggested Citation