Löschian competition under demand uncertainty

This purpose of this paper is twofold: First, we are interested in making a first step towards formally introducing demand uncertainty into the standard model of Löschian competition. Secondly, we wish to explore the effects of demand uncertainty on both the nature of the solution and comparative statics relating to the equilibrium price and market area. Several striking results are derived and then compared with those derived by Capozza and Van Order (1978), Benson (1980), Appelbaum and Katz (1986) and Ishii (1991). Copyright (c) 2009 the author(s). Journal compilation (c) 2009 RSAI.