Hotelling¡¯s Location Model in Mixed Duopoly

We investigate a mixed duopoly market where a welfare-maximizing public firm competes against a profit-maximizing private firm, using a linear-city location-then-price model with linear transportation costs. We find that, compared with the results in the purely private duopoly case discussed by Hotelling (1929) and d' Aspremont, Gabszewicz, and Thisse (1979), the condition under which price equilibrium exists for every location of private firm and public firm is changed while the main result of no subgame perfect Nash equilibrium (SPNE) for the game still holds true.