Hotelling’s competition with relative performance evaluation

This paper studies the impact of relative performance evaluation (RPE) on the equilibrium locations in a Hotelling model with quadratic transportation cost. It is shown that equilibrium location varies from maximum differentiation to minimum differentiation, depending upon the relative strength of the RPE effect over the competition effect. Moreover, social welfare is greater with than without RPE.

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Year of publication:	2015
Authors:	Kou, Zonglai ; Zhou, Min
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 130.2015, C, p. 69-71
Publisher:	Elsevier
Subject:	Spatial competition \| Maximum (minimum) differentiation \| Relative performance evaluation

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Type of publication:	Article
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; L2 - Firm Objectives, Organization, and Behavior ; R1 - General Regional Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011263397